There is growing anxiety in Nigeria’s downstream oil and gas sector as operators await the Federal Government’s decision on the future of the naira-for-crude deal between the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Petroleum Refinery.
The six-month deal, which began in October 2024, officially ends today, Monday, March 31, 2024, and the parties involved have yet to finalize whether the deal will be extended or discontinued.
The uncertainty surrounding the deal has had a direct impact on fuel prices, with petrol prices rising sharply. Dealers have blamed the recent surge on the government’s failure to extend the naira-for-crude deal, which had previously helped stabilize fuel prices.
Petrol prices have increased from around ₦860 per litre to over ₦930 per litre in just one week, with projections indicating that prices could hit N1,000 per litre if the deal is not revived.
In addition to the concerns over the naira-for-crude deal, industry sources revealed that the Dangote refinery, which produces 650,000 barrels of crude oil per day, is expected to shut down its petrol-producing unit for maintenance in June.
The maintenance, scheduled to last for 30 days, is expected to further strain Nigeria’s petrol supply.
An insider at the Ministry of Finance who spoke with Punch and familiar with the ongoing negotiations revealed that no significant progress has been made regarding the extension of the naira-for-crude deal.
“Nothing new has happened. Probably after the holidays, the committee will sit and meet,” the source stated, expressing frustration over the lack of resolution.
When the deal was first implemented on October 1, 2024, it aimed to improve supply, reduce Nigeria’s reliance on costly petroleum product imports, and decrease pump prices. However, the deal’s suspension has led to disruptions, including a sharp increase in petrol prices.
On March 19, 2025, the Dangote refinery announced a temporary halt to the sale of petroleum products in naira, citing a mismatch between the naira-denominated sales proceeds and its crude oil purchase obligations, which are denominated in US dollars.
“We must temporarily adjust our sales currency to align with our crude procurement currency,” the refinery said in a statement.
Following this announcement, petrol prices at private depots in Lagos jumped to about ₦900 per litre, from under ₦850 previously. Retail stations across the country quickly followed suit, with prices reaching ₦930 in Lagos, ₦950 in Abuja, and ₦960 in the northern parts of the country.
The situation has sparked widespread concern among industry stakeholders, who are calling for urgent resolution of the deadlock.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, in a chat with Punch expressed frustration over the issue, stating, “We’ve called for a stakeholders meeting. We are going to meet to discuss it and come out with a way forward.”
The meeting, initially scheduled for this week, has been postponed to May 1, 2025, due to the Sallah and Easter breaks.
Ukadike noted that the price fluctuations over the last six months have led to losses exceeding ₦200 billion for marketers, with many bulk buyers being discouraged by the risks involved in purchasing and selling at a loss.
Dealers have also placed blame on the Federal Government for the ongoing increase in petrol prices. According to them, the government’s failure to extend the naira-for-crude deal has led to the current crisis, with many marketers struggling to manage the volatile pricing environment.
