The Nigerian National Petroleum Company Limited (NNPC) has signed a new two-year crude supply agreement with the Dangote Petroleum Refinery, extending the partnership until 2027. The deal, concluded in August, secures a steady flow of crude oil to the 650,000-barrel-per-day facility in Lekki, Lagos, and is part of the Federal Government’s push to strengthen the naira-for-crude initiative.
According to data released by NNPC on Monday, about 82 million barrels of crude have been allocated to the refinery between October 2024 and October 2025. Of this figure, 60 per cent — approximately 49.3 million barrels — has been supplied in naira.
The fresh deal follows a recent dispute after the refinery briefly halted the sale of petrol in naira, citing the exhaustion of its crude-for-naira allocation. Intervention by the Naira-for-Crude Technical Committee prompted Dangote to reverse the suspension and resume sales.
Andy Odeh, Chief Corporate Communications Officer of NNPC, explained that the state oil company, Dangote Refinery, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reconcile crude allocations and payments regularly to match supply with value in naira. He confirmed that crude cargoes have continued to flow to the refinery.
“NNPC Limited has continued to allocate crude to Dangote Refinery in naira for the sale of petroleum products in the domestic market,” Odeh said. “In August, three cargoes were allocated, while five each were assigned for September and October. Loading for August has been completed, and September operations are currently ongoing with two vessels at terminals.”
He added that the renewed Sales and Purchase Agreement will run for two years, ensuring stability in domestic fuel supply.
The agreement has been welcomed by the Steering Committee of the Domestic Crude Oil and Refined Products Sales in Local Currency Initiative, chaired by Finance Minister Wale Edun. The committee, which includes representatives from NNPC, NMDPRA, the Central Bank of Nigeria, Afreximbank, and Dangote Refinery, confirmed that the naira-for-crude programme remains intact.
In a statement, the Finance Ministry reassured Nigerians that “there will be no disruption in the supply of refined petroleum products across the country” and reaffirmed the government’s commitment to energy security and market stability.
The initiative, introduced by President Bola Tinubu last year, directed that crude earmarked for local consumption be sold to domestic refineries, starting with Dangote’s facility. While the refinery has praised the scheme for helping to reduce costs, it has also complained of inconsistent crude supply, forcing it to rely at times on U.S. imports.
Industry stakeholders have reacted positively to the latest deal. Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, said it would help stabilise fuel supply and enhance energy security. “It is a good development. If implemented consistently, it will bring stability to the system,” he said.
IPMAN’s spokesperson, Chinedu Ukadike, echoed this view but urged that modular refineries also benefit from local crude allocations. “You cannot be exporting crude while Dangote is importing,” he noted. “By supplying crude oil to local refineries, Nigerians can be assured of uninterrupted supply of petroleum products. The government should also put a framework in place to end disputes that could threaten the economy.”
With the new supply agreement in place, the Dangote Refinery is expected to receive more stable feedstock, reducing its dependence on imports and strengthening Nigeria’s domestic fuel security.
