Dangote Refinery has announced plans to stop loading petroleum products for the Nigerian market due to the stalled renegotiation of the naira-for-crude deal with the Nigerian National Petroleum Company (NNPC).
This development has raised concerns in Nigeria’s downstream oil sector.
Key Details:
- Reason for Suspension: The refinery currently sources its crude stock from the international market in dollars but sells petroleum products to Nigerian marketers in naira under the naira-for-crude deal. With the deal now ended and renegotiations making little progress, the refinery has decided to halt local supply.
- Export Operations: Despite the suspension of local supply, the refinery will continue to load petroleum products for export, as it remains operational with crude sourced internationally.
- Background: The naira-for-crude deal, initiated in October 2024, allowed local refineries to purchase crude oil in naira to improve supply and reduce pump prices. However, the NNPC recently confirmed that the current deal will expire at the end of March 2025, with negotiations for a new agreement still ongoing.
- Impact on Supply: The refinery’s decision could lead to disruptions in the availability of petroleum products in the Nigerian market, potentially affecting prices and supply stability.
This situation underscores the challenges in balancing local supply needs with international market dynamics.
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