Internal documents from the Nigerian National Petroleum Company Limited (NNPCL), presented at the Federation Account Allocation Committee (FAAC) meetings, revealed that the Federal Government supplied N219.38 billion worth of crude oil to the Dangote Petroleum Refinery in the first four months of 2025. This figure, equivalent to $138 million at the average exchange rate of N1,595.689/$1, reflects sales of 1,901,850 barrels from the Okwuibome field and Nigerian Agip Exploration, priced between $74.87 and $80.34 per barrel. The data, obtained by BusinessDay, highlights Nigeria’s push to bolster domestic refining, though the naira-for-crude initiative faced significant hurdles, including a temporary suspension in March.
The Dangote Refinery, Africa’s largest with a 650,000 barrels per day (bpd) capacity, paused naira-based petroleum sales on March 19, 2025, citing a mismatch between naira-denominated sales proceeds and dollar-based crude purchase obligations. This led to petrol prices at Lagos private depots surging above N900 per liter, exacerbating costs for consumers amid 23.71% inflation in April 2025. On April 9, the Federal Executive Council (FEC) reaffirmed the naira-for-crude policy as a permanent strategy to enhance local refining and stabilize fuel prices. The Technical Sub-Committee on Crude and Refined Product Sales in Naira, chaired by Finance Minister Wale Edun, emphasized its role in reducing foreign exchange pressure, with the naira at N1,585.50/$1 in May, per CBN data.
Monthly breakdowns show crude supplies to Dangote surged 538% from January to April: N17.52 billion in January, N32.95 billion in February (88% increase), N56.97 billion in March (73% rise), and a peak of N111.95 billion in April (96.4% spike). Nine cargoes were delivered, facilitated by Afreximbank at exchange rates between N1,501.22 and N1,562.91. However, Dangote reported inadequate domestic crude allocations, forcing imports of 12.6 million barrels (35% of its 400,000 bpd throughput) from the U.S., Brazil, and Equatorial Guinea, per S&P Global. NNPCL supplied 48 million barrels in naira since 2023, but underdelivered on its 300,000 bpd commitment, reducing its stake in Dangote from 20% to 7.2% in July 2024.
Concurrently, Nigeria earned N231.47 billion ($153.03 million) from crude exports to foreign buyers from January to April, balancing domestic and international priorities. Exports peaked at N121.44 billion ($79.07 million) in March but plummeted to N2.53 billion ($1.59 million) in April, reflecting a strategic shift toward local refining. Total FAAC oil and gas receipts for April reached N1.01 trillion ($6.25 billion), including $4.56 billion from gas exports and $130 million from other crude sales, though most revenue streams dropped 97.97% from March’s N771.46 billion, per FAAC documents.
Fuel marketers, led by IPMAN Vice President Hammed Fashola, urged the government to peg crude prices for local refineries to ensure affordable petrol and diesel, critical as pump prices hit N945 in Abuja and N915 in Lagos, per Vanguard. Fashola emphasized collaboration with Dangote to leverage its 500,000 bpd output, exceeding Nigeria’s 480,000 bpd demand, to cut import costs by $1 billion annually in demurrage fees. Posts on X, like @DangoteGroup’s June 15 announcement, highlighted plans for nationwide petrol and diesel distribution using 4,000 CNG tankers starting August 15, 2025, with credit for bulk buyers. However, @FinPlanKaluAja1 noted NNPCL’s struggles, crediting Dangote with averting an economic crisis.
Analysts warn that without consistent crude supply and pricing agreements, rising fuel costs could fuel inflation, projected at 25% by mid-2026 with a 6% naira depreciation, per the AfDB. The naira-for-crude deal, initially a six-month pilot ending March 31, 2025, awaits renewal discussions, per Punch. Stakeholders, including Dr. Muda Yusuf of CPPE, advocate for discounted crude rates to local refineries to ease consumer burdens and align with Tinubu’s energy security goals, as seen in the June 6 Lekki Deep Seaport Access Road commissioning. The policy’s success hinges on addressing NNPCL’s supply gaps and sustaining naira-based transactions to stabilize Nigeria’s $20 billion fuel market.
