FG Agrees to Dollar Swap Deal With Dangote Refinery to Sustain Naira Fuel Sales, Crash Prices
- The Federal Government reached an agreement with Dangote Refinery on Friday to supply dollars in exchange for naira from petrol sales
- A Dangote management official said the refinery had previously halted naira fuel sales after failing to receive dollars from the CBN
- The Dangote Refinery spent about $4.48bn importing 40.40 million barrels of crude oil between May and June 2026
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Federal Government has agreed to provide foreign exchange to the Dangote Petroleum Refinery in exchange for naira generated from petrol sales, a company official told journalists, marking a fresh attempt to salvage the troubled naira-for-crude arrangement.
A management official at the refinery, who spoke on condition of anonymity given the sensitivity of the matter, said the agreement was reached on Friday, July 31, 2026.
Source: Facebook
Under the deal, the government will supply dollars to the refinery to cover the cost of crude it purchased in foreign currency, while the refinery continues selling fuel to Nigerian consumers in naira.
Why Dangote halted naira sales
The official explained that the forex shortfall had become so severe that the refinery was forced to suspend naira-denominated fuel sales earlier this year, according to a Punch report.
The Central Bank of Nigeria had not been converting naira receipts into dollars, even though the refinery had already paid for crude in hard currency.
"As you know, we had earlier stopped selling in naira as we were not getting the dollars from the Central Bank of Nigeria for the products we sold for naira, even though we had paid in US dollars for the crude. Now, we have been assured that we will be given the dollars," the official said.
The source added that the dollar amounts involved run into billions, pointing to crude purchases from suppliers in the United States, Angola, Libya, Ghana, and the Nigerian National Petroleum Company Limited, none of whom accept naira as payment.
Crude shortfall driving the crisis
At the heart of the problem is a persistent gap between what the refinery was promised under the naira-for-crude scheme and what it actually received.
The arrangement was originally meant to deliver about 13 million barrels of crude to the refinery each month.
In practice, monthly deliveries under the scheme had dropped to around four million barrels, forcing the refinery to source the remainder from international markets using dollars.
The refinery imported a combined 40.40 million barrels between May and June 2026, spending roughly $4.48bn on feedstock.
May alone accounted for 21.47 million barrels at a total landed cost of $2.68bn, with a further 18.93 million barrels worth $1.80bn arriving in June.
Naira-for-Crude deal collapses?
The naira-for-crude deal was originally proposed by President Bola Tinubu at a Federal Executive Council meeting on July 29, 2024, as a way to stabilise domestic fuel prices.
The Federal Executive Council adopted the proposal, designating the Dangote refinery as the pilot for the scheme, covering 450,000 barrels earmarked for local consumption.
Source: Getty Images
The arrangement has had a turbulent history. The Nigerian National Petroleum Company Limited suspended it in the first quarter of 2025, triggering another halt in naira fuel sales at the refinery, before the Federal Government intervened and ordered it to continue indefinitely.
Federal Government officials had not responded to requests for further comment on the latest dollar swap agreement at the time of reporting.
Dangote replies FG on crude oil supplies
Legit.ng earlier reported that Dangote Petroleum Refinery has pushed back against claims by the Nigerian National Petroleum Company Limited (NNPCL) that it fully honoured its commitments under the Federal Government's naira-for-crude programme, saying the national oil company delivered fewer than 25 per cent of the crude cargoes the refinery expected under the arrangement.
A senior executive at the Dangote Group told Petroleumprice.ng that the refinery received only three of the 14 cargoes anticipated under the supply framework.
The refinery's response followed a statement from NNPCL spokesman Andy Odeh, who told PUNCH that the company had supplied every available naira-denominated crude cargo to Dangote Refinery and had not withheld any feedstock.
Source: Legit.ng
