FG sold crude worth N219.38bn to Dangote Refinery in early 2025, despite sales suspension and naira-for-crude tensions as local fuel prices surged
[dropcap]T[/dropcap]he Dangote crude oil deal with the Nigerian government saw the sale of petroleum valued at N219.38 billion in just four months of 2025, despite a temporary halt in domestic crude supply and deepening tensions over the naira-for-crude policy.
Also read: Dangote fuel price hike sparks fresh concerns over petrol affordability in Nigeria
This revelation comes from documents obtained from the Nigerian National Petroleum Company Limited (NNPCL), submitted to the Federation Account Allocation Committee (FAAC).
Between January and April 2025, nine cargoes totalling over 1.9 million barrels were delivered to the 650,000 barrels-per-day Dangote Petroleum Refinery.
The crude was sourced from the Okwuibome field operated under Production Sharing Contracts by Sterling Oil and Nigerian Agip Exploration.
Pricing ranged from $74.87 to $80.34 per barrel, with naira conversion rates fluctuating between ₦1,501 and ₦1,562 per dollar.
The refinery had in March suspended sales of its petroleum products in naira, citing foreign exchange risks and a mismatch between its crude purchase obligations and retail revenue.
“Our sales of petroleum products in naira have exceeded the value of naira-denominated crude we have received,” the company stated in a notice to customers, prompting a halt in local supply and a surge in petrol loading costs, which hit over ₦900 per litre in Lagos depots.
Despite this, the Federal Executive Council moved swiftly to reaffirm the naira-for-crude deal as a “key policy directive” supporting sustainable refining.
Still, Dangote Refinery has described crude allocations as inadequate, forcing reliance on imports from the United States.
Sales to the refinery increased rapidly month-on-month: from ₦17.52bn in January to ₦111.95bn in April, reflecting a 538 per cent growth in domestic crude allocation.
Meanwhile, crude oil exports generated ₦231.47bn, slightly ahead of domestic sales, showing a near-even balance between foreign earnings and local supply support.
However, crude oil exports collapsed in April, with just $1.59m earned compared to over $79m in March. Similarly, domestic crude supply to refiners dropped to zero, sparking fears of renewed fuel scarcity.
Gross revenue from oil and gas in April stood at $6.25bn, largely driven by gas exports and residual payments.
With petrol and diesel prices rising, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has urged the government to fix crude rates for local refiners at discounted levels to allow affordable retail pricing.
“This is the time we need the naira-for-crude deal mostly,” said IPMAN Vice President Hammed Fashola, stressing collaboration between the Federal Government and Alhaji Aliko Dangote.
Sources close to the deal, however, suggest it may be unsustainable under current conditions. With international trade standards prioritising dollar transactions, naira-denominated crude poses long-term challenges for liquidity and fiscal forecasting.
The latest FAAC figures confirm that domestic receipts from crude oil dropped to zero in April, reflecting supply strains, while transfers to the federation account fell by 41 per cent compared to March.
Also read: Dangote direct distribution reduces inflation, creates thousands of jobs
The situation raises serious questions about the viability of the government’s domestic refining strategy amid foreign exchange volatility and infrastructural constraints.
Oreoluwa is an accountant and a brand writer with a flair for journalism.
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