NNPC Seals Fresh Two-Year Crude Supply Deal with Dangote Refinery to Guarantee Local Energy Security Amid Naira-for-Crude Debate

The Nigerian National Petroleum Company Limited (NNPC) has entered into another two-year crude supply agreement with the Dangote Petroleum Refinery, ensuring uninterrupted feedstock for the 650,000-barrel-per-day facility located in Lekki, Lagos.

Findings revealed that the deal, which was signed last month, aligns with the Federal Government’s drive to guarantee steady domestic crude supply, especially under the naira-for-crude arrangement aimed at boosting local refining and reducing dependence on imported petroleum products.

According to data obtained from NNPC, a total of 82 million barrels of crude have been allocated to the Dangote refinery between October 2024 and October 2025. Out of this figure, 60 per cent (49.3 million barrels) has been supplied in naira, underscoring the administration’s commitment to sustaining the local currency-backed crude sales initiative.

This comes against the backdrop of Dangote refinery’s recent announcement halting petrol sales in naira due to the exhaustion of its naira crude allocation. However, following swift intervention by the Naira-for-Crude Technical Committee Chairman, the refinery reversed its decision and resumed sales in the local currency.

Speaking with reporters, NNPC’s Chief Corporate Communications Officer, Andy Odeh, clarified that the company has consistently allocated crude to the Dangote facility in naira. He stressed that the new Sales and Purchase Agreement, signed in August 2025, has a tenure lasting until 2027.

“In line with the FGN Crude for Naira Initiative, NNPC Limited has continued to allocate crude to Dangote refinery in naira for the sale of products in the domestic market.

“On the basis of the above, NNPC Limited, DPRP (Dangote Petroleum Refinery and Petrochemical), and NMDPRA periodically reconcile the volume and cost of product supplied in naira commensurate with the crude delivered.

“NNPC and DPRP have negotiated and in August signed a new Sales and Purchase Agreement for a tenure of two years,” Odeh said.

He disclosed that NNPC allocated three naira crude cargoes in August and five cargoes each for September and October. While crude loading for August had been completed, September operations were ongoing with two vessels at terminals undergoing pre-loading formalities.

“In total, from October 2024 to October 2025, a total of 82 million barrels of crude have been allocated to the refinery, with 60 per cent of this total (49.3 million barrels) being naira cargoes,” he stated.

The Steering Committee of the Domestic Crude Oil and Refined Products Sales in Local Currency Initiative, chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, assured Nigerians that the naira-for-crude arrangement remains intact and will not be disrupted.

The Director of Information and Public Relations at the Finance Ministry, Mohammed Manga, confirmed in a statement that a high-level meeting held over the weekend with representatives from the Budget and Economic Planning Ministry, the Federal Inland Revenue Service, the Central Bank of Nigeria, Afreximbank, NNPC, NMDPRA, and the Dangote refinery resolved all outstanding issues.

He reaffirmed that “there will be no disruption in the supply of refined petroleum products across the country. For the avoidance of doubt, the committee reassured that the crude oil for the naira initiative will continue.

“The Federal Government remains fully committed to ensuring energy security, protecting consumers and maintaining stability in the domestic petroleum products market.”

The initiative, introduced by President Bola Tinubu in 2024, was designed to prioritize domestic refineries such as Dangote’s, which had previously struggled with insufficient local supply and resorted to importing crude, particularly from the United States.

Independent oil marketers have welcomed the renewed deal, describing it as critical for market stability and fuel availability.

The Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, praised the development:

“It is a good development. It will bring stability, sort of. We all know the impact of that when the programme started. Everybody was happy about it. If they can renew it and get it going on, it is good for the system; it will bring stability,” Fashola said.

Also, IPMAN spokesman, Chinedu Ukadike, lauded the move but urged the Federal Government not to sideline modular refineries in its crude allocation.

“It is good news. NNPC should continue to supply Dangote crude oil. You cannot be exporting crude while Dangote is importing crude. By supplying crude oil to the Dangote refinery, we can have an uninterrupted supply of petroleum products in our filling stations, and the masses will not suffer.

“As independent marketers, we are highly committed and service-oriented to ensure there is a continuous flow of petroleum products from our tanks to the end users. The government should also consider modular refineries in its domestic crude supply obligation,” Ukadike stated.

He further advised the government to produce a white paper to permanently resolve the crisis between the Dangote refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), warning that unresolved disputes could jeopardize the nation’s economy.

With the signing of the new two-year crude supply agreement, the Dangote refinery is expected to receive more consistent local crude supplies, bolstering its refining capacity and ensuring the stability of petroleum product supply across the country.

Energy experts say the development could reduce Nigeria’s reliance on imported fuels, strengthen the naira-for-crude framework, and ultimately advance the Federal Government’s quest for energy security.