Dangote Refinery, NNPC Sign Fresh Crude Deal to End Petrol Shortages in Nigeria
- Amid the ongoing industrial action, the Dangote Refinery has inked a fresh crude oil supply deal with the NNPC
- The new deal comes under the Crude-for-Naira Initiative, aimed at ending crude shortages at the mega refinery
- The agreement ensures that the 650,000 bpd-capacity refinery gets a steady and adequate supply to continue to operate
Pascal Oparada, a reporter for Legit.ng, has over ten years of experience covering technology, energy, stocks, investment, and the economy.
The Nigerian National Petroleum Company Limited (NNPC) has renewed its partnership with the Dangote Petroleum Refinery through a fresh two-year crude oil supply agreement.
The deal, signed in August, ensures a steady allocation of crude oil to the 650,000-barrel-per-day facility in Lekki, Lagos, through 2027.
Source: Facebook
The agreement reinforces the Federal Government’s Crude-for-Naira Initiative, aimed at guaranteeing domestic energy security while reducing reliance on imported feedstock.
Reports show that from October 2024 to October 2025 alone, NNPC has already allocated 82 million barrels of crude to the refinery, with 60 per cent (about 49.3 million barrels) denominated in naira.
Resolved crisis over naira payments
Just weeks ago, Dangote briefly halted petrol sales in naira, citing the exhaustion of its crude-for-naira allocation.
The move sparked fears of supply disruptions until the intervention of the Naira-for-Crude Technical Committee, chaired by Zacch Adedeji, the boss of the Federal Inland Revenue Service.
The refinery quickly reversed its decision, announcing the continuation of sales in local currency, according to a prior report by Legit.ng.
According to Andy Odeh, NNPC’s Chief Corporate Communications Officer, the company has remained committed to supplying crude in naira, with allocations carefully reconciled among NNPC, Dangote Refinery, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
“NNPC Limited has continued to allocate crude to Dangote refinery in naira for the sale of products in the domestic market,” Odeh said, confirming that three naira-denominated crude cargoes were allocated in August, and five each for September and October 2025.
Federal government’s commitment
According to a report by Punch, the Steering Committee of the Domestic Crude Oil and Refined Products Sales in Local Currency Initiative, chaired by Finance Minister Wale Edun, assured Nigerians that there will be no disruption to fuel supply.
The committee includes key stakeholders such as the Ministry of Budget and Economic Planning, the Central Bank of Nigeria, Afreximbank, NNPC, NMDPRA, and representatives of the Dangote refinery.
“The Federal Government remains fully committed to ensuring energy security, protecting consumers and maintaining stability in the domestic petroleum products market,” the committee’s statement affirmed.
The naira-for-crude framework was introduced in 2024 under President Bola Tinubu to ease pressures on the refinery and stabilise fuel supply.
While Dangote has repeatedly praised the initiative, the refinery has also flagged low domestic crude availability as a challenge, forcing reliance on U.S. imports. The new agreement is expected to increase local crude availability.
Marketers applaud the deal
The agreement has drawn praise from petroleum marketers who see it as a major step toward ending persistent fuel shortages in Nigeria.
Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, said the renewal would bring stability to the downstream sector.
“If they can renew it and get it started, it is good for the system; it will bring stability,” he said.
IPMAN’s spokesman, Chinedu Ukadike, also welcomed the deal but urged the government not to neglect modular refineries.
“You cannot be exporting crude while Dangote is importing crude.
By supplying crude oil to the Dangote refinery, we can have an uninterrupted fuel supply across filling stations, and the masses will not suffer,” Ukadike said.
Recall that Legit.ng reported that the mega refinery faced a crude oil shortage recently, which experts said was responsible for a hike in petrol prices.
Also, the refinery's residual fluid catalytic cracker (RFCC) reportedly broke down, leading to a halt in petrol production.
What this means for Nigerians
With Nigeria’s only mega-refinery assured of a consistent crude supply, analysts believe the risk of fuel scarcity and price shocks will significantly reduce.
The crude-for-naira initiative also provides relief to foreign exchange reserves by cutting the need for dollar payments in crude transactions.
If fully implemented and extended to modular refineries, the policy could deepen domestic refining capacity, curb product imports, and make fuel queues a thing of the past.
Source: UGC
For now, the renewed NNPC-Dangote deal marks a crucial step toward stabilising Nigeria’s volatile fuel market and securing the nation’s energy future.
Dangote Refinery breaks silence on petrol prices
Legit.ng earlier reported that the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) sparked controversy this week after alleging that the Dangote Refinery sells petrol to international traders at a discount of N65 per litre compared to its Nigerian partners.
DAPPMAN’s executive secretary, Olufemi Adewole, told reporters that Nigerian importers had in some cases sourced Dangote’s petrol from traders in Lomé, Togo, at lower prices than what was offered locally.
But in a strongly worded statement on Monday, September 15, 2025, the Dangote Group rejected the accusations as “misleading and inaccurate.”
Don't miss out! Join Legit.ng's Sports News channel on WhatsApp now!
Source: Legit.ng
