Naira-for-crude policy under review as Dangote refinery suspends local sales
Insiders revealed that the Nigerian National Petroleum Company Limited (NNPCL) has allocated a significant portion of its crude oil output to foreign creditors, creating challenges for domestic refiners, including the Dangote Petroleum Refinery.
The crude allocation, intended to settle NNPCL’s external loans, has reportedly strained the naira-for-crude agreement between the national oil firm and the Dangote refinery. This prompted a temporary suspension of petroleum product sales in naira by the refinery on Wednesday.
Amid growing concerns, multiple sources from the Federal Ministry of Finance and the Federal Ministry of Petroleum Resources confirmed that the Technical Sub-Committee on the Naira-for-Crude Policy would reconvene on Monday to address the matter. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has been tasked with proposing potential solutions for the panel’s review.
An insider familiar with the panel’s activities clarified that the naira-for-crude arrangement is not permanently cancelled but is facing difficulties due to NNPCL’s commitments to foreign obligations.
“The scheme won’t end, but the issue is crude availability, as NNPCL has pre-sold large volumes,” the source told The Punch.
Meanwhile, oil marketers are seeking alternatives following the suspension of naira-based transactions by the Dangote refinery. The outcome of Monday’s meeting is expected to determine the way forward for the policy.
