Nigeria’s Naira-for-Crude Oil Deal Stalls as Deadline Passes
The much-anticipated deal between the Nigerian National Petroleum Company Limited (NNPC) and Dangote Petroleum Refinery to supply crude oil in naira has hit a snag, with sources indicating that the deal has yet to commence as of October 3. The agreement was initially expected to kick off on October 1, but officials from the Dangote refinery and NNPC have remained mum on the issue.
The deal, which was approved by the Federal Executive Council in September, aimed to reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country. Under the agreement, NNPC would supply 385,000 barrels of crude oil per day to Dangote refinery, to be paid for in naira.
However, officials from the three domestic refineries, including Dangote, have confirmed that they are still awaiting the Federal Government for the supply of crude oil in naira. “We are still waiting for the government to provide us with the crude oil in naira,” said a senior official with a domestic refinery, who spoke on condition of anonymity.
Another source familiar with the deal revealed that the crude oil refiners’ body in Nigeria has not been communicated yet on the deal, and is awaiting official communication from the government. “Deals of this nature take a while before they are completed. There are a lot of things to be sorted before a final decision is reached. So we have to wait for them,” the source said.
The government had explained in September that the naira-for-crude initiative would help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country. However, it appears that the deal has hit a roadblock, with no clear timeline for its implementation.
As the deadline for the deal’s implementation passes, questions are being raised about the future of the initiative and its potential impact on the Nigerian economy.
