The Nigerian National Petroleum Company (NNPC) Limited has dismissed reports suggesting it unilaterally terminated the naira-for-crude oil supply agreement with Dangote Refinery.
In a statement on Monday by its Chief Corporate Communications Officer, Olufemi Soneye, the company explained that the agreement was designed as a six-month contract, subject to availability, and is expected to expire at the end of March 2025.
The statement noted that discussions are currently ongoing to establish a new contract.
NNPC stated that more than 48 million barrels of crude oil had been supplied to Dangote Refinery under the current arrangement since October 2024. In total, it said over 84 million barrels have been made available to the refinery since it commenced operations in 2023.
The company reaffirmed its commitment to continue supplying crude oil for local refining, based on terms and conditions agreed upon by both parties.
The statement reads, “Re: Clarification on the Naira Crude Contract Between NNPC Limited and Dangote Refinery.
“NNPC Limited has noted recent reports circulating on social media regarding the alleged unilateral termination of the crude oil sales agreement in Naira between NNPC Ltd. and Dangote Refinery.
“To clarify, the contract for the sale of crude oil in Naira was structured as a six-month agreement, subject to availability, and expires at the end of March 2025. Discussions are currently ongoing towards emplacing a new contract.
”Under this arrangement, NNPC Ltd. has made over 48 million barrels of crude oil available to Dangote Refinery since October 2024. In aggregate, NNPC Ltd. has made over 84 million barrels of crude oil available to the Refinery since its commencement of operations in 2023.
“NNPC Limited remains committed to supplying crude oil for local refining based on mutually agreed terms and conditions.”
Earlier, Nigerians on social media had reacted to reports of the discontinuation of the deal, describing it as economic sabotage and adding that it would spell doom for Nigerians.
Reacting to the development on X, a user, @KHALYD16 wrote, “Our oil. Our currency. Our investors. Yet, NNPC wants Dangote to buy crude in dollars? This is not economics, it’s sabotage! Weak leaders, wicked policies, and a dying Naira. How much more can Nigerians take?
In a similar reaction, another user, @PaulAlaje tweeted, “We once said when our local refineries come up, there would be no need to import, but now we have seen an increase in petrol import by over 100%.
If NPPCL stops selling crude to local refineries, it’ll spell doom for everyone. It’ll negatively affect the price and exchange rate.”
@O_basslet wrote, “Importers of refined fuel are running at massive loss and suddenly NNPC wants to halt Naira for crude for local refiners just to help the importers. This country is unbelievable.”
“So, after all the talk about supporting local refining, NNPC is making things harder for them?
This is madness!
If local refiners can’t get crude, fuel prices will remain high,” @Sundayjctrucks tweeted.
In his submission, @IEnakhena is of the view that stopping the deal will result in increased demand for the dollar, which will, in turn, lead to the devaluation of the Naira.
He wrote, “If Nigeria stops accepting naira for crude, buyers will need to source foreign currency (mainly U.S. dollars), increasing demand for dollars. This could further devalue the naira, making imports more expensive and worsening inflation.”
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