NNPC Dangote crude supply deal renewed for two years, securing 82m barrels with 60% paid in naira to stabilise local fuel market

NNPC Dangote crude supply deal has officially been renewed for another two years, ensuring the continuous supply of crude oil to the 650,000-barrel-per-day Dangote Petroleum Refinery in Lekki, Lagos.

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The Nigerian National Petroleum Company Limited signed the revised Sales and Purchase Agreement with the refinery in August.

Under the new terms, the state-owned oil firm will deliver 82 million barrels of crude to the refinery between October 2024 and October 2025, of which 60 per cent (49.3 million barrels) will be paid for in naira.

This aligns with the Federal Government’s Naira-for-Crude Initiative, launched last year by President Bola Tinubu to prioritise local crude supply and reduce the refinery’s reliance on expensive imports.

The agreement comes shortly after a brief disruption in fuel sales by the Dangote refinery, following the exhaustion of its naira crude quota.

Sales resumed swiftly after intervention by the Naira-for-Crude Technical Committee, chaired by the Minister of Finance, Wale Edun.

Speaking to The PUNCH, NNPC’s Chief Corporate Communications Officer, Andy Odeh, confirmed that the supply and payment reconciliation is ongoing in collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Dangote Refinery.

“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,” Odeh stated.

He further disclosed that three naira-based cargoes were delivered in August, with five cargoes each scheduled for September and October.

Two vessels are currently at terminals undergoing pre-loading checks for September allocations.

Meanwhile, the Steering Committee overseeing the Naira-for-Crude Initiative has reassured Nigerians of uninterrupted supply of petroleum products nationwide.

A high-level meeting, chaired by Edun, included officials from NNPC, the Central Bank, Afreximbank, the Federal Inland Revenue Service, and the Dangote Group.

“There will be no disruption in the supply of refined petroleum products across the country. The crude oil for the naira initiative will continue,” said Mohammed Manga, spokesperson for the Finance Ministry.

Independent petroleum marketers have welcomed the renewed agreement.

Vice President of IPMAN, Hammed Fashola, hailed the move as critical for market stability.

“If they can renew it and get it going, it’s good for the system; it will bring stability,” he said.

IPMAN spokesperson Chinedu Ukadike echoed the sentiment but urged the government not to overlook modular refineries+, which also face supply challenges.

He emphasised that consistent supply to the Dangote refinery will ensure steady fuel availability and reduce economic pressure on consumers.

“You cannot be exporting crude while Dangote is importing crude,” Ukadike argued. “Supplying local refineries is the way to maintain uninterrupted petroleum product flow across Nigeria.”

He also called on the Federal Government to resolve ongoing industrial disputes between Dangote and PENGASSAN, warning that prolonged tensions could impact the sector.

The NNPC Dangote crude supply deal is expected to significantly reduce the country’s dependence on fuel imports and support broader energy security efforts.

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With production ramping up at the Dangote facility, Nigerians may soon feel the benefits of a more locally focused petroleum supply chain.