By Gwurld4026 
Fuel Supply Disruption: Dangote’s Naira-for-Crude Stalemate
Dangote Petroleum Refinery has announced a suspension of fuel sales to the Nigerian market due to challenges in the naira-for-crude oil exchange agreement with the Nigerian National Petroleum Company Limited (NNPCL). This arrangement, initiated in October 2024, allowed domestic refiners like Dangote to purchase crude oil in naira instead of U.S. dollars, aiming to stabilize foreign exchange reserves.
The refinery, with a capacity of 650,000 barrels per day, has been selling petroleum products to Nigerian marketers in naira under this agreement. However, delays and challenges in obtaining sufficient crude volumes have led to a mismatch between the refinery’s sales proceeds and its crude oil purchase obligations, which are denominated in U.S. dollars.
As a result, Dangote Refinery has decided to halt fuel sales in naira and will continue loading petroleum products for export, sourcing crude stock from the international market in dollars.
This development may lead to increased petrol prices and a weakened naira, as traders seek U.S. dollars for transactions. The NNPCL is currently in discussions to potentially renew the naira-for-crude deal to address these challenges.
The Dangote Petroleum Refinery, developed by billionaire Aliko Dangote, is central to Nigeria’s goal of ending petrol imports and achieving energy independence. The current suspension of fuel sales in naira underscores the complexities in balancing local currency transactions with international crude purchase obligations.