The Nigerian National Petroleum Corporation (NNPC) has signed a two‑year crude supply agreement with Dangote Refinery, ensuring steady deliveries of crude oil to the 650,000‑barrel‑per‑day plant in Lekki, Lagos. Signed in August, the deal is part of the federal government’s “Crude for Naira” initiative, which seeks to promote the use of the local currency for domestic transactions. Under the agreement, NNPC will allocate crude to Dangote in naira, and the refinery will use the oil to produce petroleum products for the domestic market.
The volume and cost of the supplied products will be periodically reconciled by NNPC, Dangote Petroleum Refinery and Petrochemical, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority. In August, NNPC allocated three crude cargoes to the refinery, with an additional five cargoes scheduled for September and October.
This development follows the intervention of the Naira for Crude Technical Committee chairman, which led to the lifting of a suspension on petrol sales in naira by Dangote Refinery. However, the deal comes amid tension between Dangote Refinery and the Petroleum and Natural Gas Senior Staff Association (PENGASSAN), which has instructed its members to cut gas and crude supplies to the refinery over alleged mass dismissals of Nigerian workers. Despite federal government mediation, a meeting between the parties ended in a deadlock on Monday, highlighting ongoing challenges in Nigeria’s oil and gas sector.
The signing of the crude supply agreement underscores the federal government’s commitment to using the naira for domestic transactions and is expected to positively impact the operations of Dangote Refinery, one of Africa’s largest refineries. As the dispute between Dangote Refinery and PENGASSAN continues to unfold, it remains uncertain how the parties will resolve their differences and move forward.
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