The Dangote Petroleum Refinery has commended the Federal Government’s Naira-for-Crude policy, stating that it has significantly contributed to stabilizing the naira and should be expanded in Nigeria’s overall economic interest. According to the refinery’s newly appointed Managing Director, David Bird, the policy has been effective in supporting domestic refining.
Bird disclosed that between 30 and 40 percent of the refinery’s current crude feedstock is sourced under the Naira-for-Crude arrangement, with ongoing monthly engagements between the refinery and the Nigerian National Petroleum Company Limited (NNPC) to determine suitable crude grades. He noted that the refinery would welcome an expansion of the policy, as it has contributed to the stabilization of the naira.
The Naira-for-Crude policy, which began in October 2024, allows local refineries to purchase crude oil from NNPC in naira instead of US dollars, reducing pressure on foreign exchange and lowering transaction costs. The approach also stabilizes the local currency and strengthens domestic refining capacity. Under the arrangement, refineries supply petroleum products to the Nigerian market in naira, helping to retain more value within the local economy.
Bird added that the refinery has the capacity to absorb additional crude volumes if allocations are increased, noting that continued engagement with NNPC and the Federal Government is ongoing. He also pointed to global geopolitical uncertainties as a reason Nigeria should prioritize domestic crude supply, citing the potential return of Venezuelan crude to the market as an example.
The Dangote Refinery is optimized for Nigerian crude, but supply volumes fluctuate. Approximately 30 percent of crude supply is obtained through the Naira-for-Crude programme, another 30 percent from Nigerian crudes purchased on the spot market, and the remaining 40 percent comes from international grades. Despite this mix, the refinery believes that expanding the Naira-for-Crude policy would be beneficial for the country’s economy.
The Federal Government’s support for domestic refining through the Naira-for-Crude policy is seen as a positive step towards reducing the country’s reliance on foreign exchange and promoting economic growth. As the refinery continues to engage with NNPC and the government, it is likely that the policy will be expanded, leading to increased domestic crude supply and a more stable economy.
