The Nigerian National Petroleum Company Limited (NNPC) reported significant crude oil sales to the Dangote Petroleum Refinery in July 2025, marking a resurgence of the naira-for-crude arrangement. Internal documents reveal that Dangote Refinery accounted for 32.33% of NNPC’s total crude sales during the month, amounting to N34.64 billion (approximately $22.51 million at prevailing exchange rates). This transaction involved a total of 340,000 barrels of crude, divided into three separate consignments. Two shipments of Antan blend crude, totaling 240,000 barrels, were lifted by NNPC Trading and generated N23.44 billion. A third shipment of 100,000 barrels of Okwuibome crude, produced by SEEPCO, was also sold to Dangote Refinery for N11.20 billion. This latter transaction solidified Dangote’s significant share of the total crude sales revenue for July. This resurgence of the naira-for-crude deal follows its renewal in April 2025, highlighting the government’s continued commitment to supporting domestic refining capacity and stabilizing fuel prices.
The July transaction underscores a growing trend in NNPC’s crude sales. Earlier reports indicated that Dangote Refinery had already purchased a substantial volume of crude from NNPC during the first quarter of 2025. These transactions totaled N107.44 billion, representing over 32% of NNPC’s total crude sales revenue for that period. Combined with the July figures, Dangote Refinery’s crude purchases from NNPC have reached N142.08 billion within the first seven months of 2025. These figures demonstrate the significant role the refinery is playing in the domestic crude market and its growing importance as an offtaker for NNPC’s production. The consistent share of purchases by Dangote Refinery highlights the strategic importance of this partnership for both entities, and potentially, for the stability of the Nigerian petroleum market.
The pricing mechanism for these transactions has also been a point of interest. The crude oil sold to Dangote Refinery was priced using prevailing international benchmark rates, ranging from $74.87 to $80.34 per barrel during the first quarter of 2025. The naira equivalent was then calculated using exchange rates provided by the African Export-Import Bank (Afreximbank), typically falling between N1,501.22 and N1,562.91 per US dollar. This reliance on Afreximbank’s advised exchange rate ensures transparency and a standardized process for determining the naira value of these transactions, mitigating potential disputes and contributing to the stability of the naira-for-crude arrangement. This process also underscores the importance of external financial institutions in facilitating and regulating complex domestic trade agreements.
The naira-for-crude initiative was originally introduced by the Federal Executive Council (FEC) in July 2024 as a strategic measure to address several key challenges in the Nigerian petroleum sector. The primary objectives were to reduce pressure on the US dollar, ensure a stable supply of crude oil to domestic refineries like Dangote’s, and ultimately, stabilize and potentially reduce fuel prices for Nigerian consumers. By allowing local refineries to purchase crude in naira, the government aimed to reduce the demand for US dollars in the domestic market, thereby preserving foreign reserves and potentially strengthening the naira. This initiative was also expected to bolster local refining capacity and reduce Nigeria’s reliance on imported petroleum products.
The implementation of the naira-for-crude agreement has, however, encountered some challenges. In March 2025, Dangote Refinery temporarily suspended sales of petroleum products in naira, citing a mismatch between their naira-denominated sales proceeds and their dollar-denominated crude oil purchase obligations. This temporary suspension highlighted the complexity of transitioning to a local currency-based system within a globally dollar-dominated oil market. The temporary halt necessitated renewed discussions and adjustments to the agreement to ensure its long-term sustainability.
Despite the temporary setback, the FEC reaffirmed its commitment to the naira-for-crude initiative, emphasizing its long-term strategic importance. The council directed the full implementation of the agreement with local refineries, clarifying that it is not a temporary measure but a core policy aimed at fostering the sustainable growth of local refining capacity. The resumption of crude sales to Dangote Refinery in naira, as evidenced by the July transactions, signals a renewed effort to make this initiative a cornerstone of Nigeria’s petroleum sector strategy. The continued success of this arrangement hinges on the ability to effectively manage currency fluctuations and ensure a stable and predictable pricing mechanism that benefits both the NNPC and the participating refineries.
