The Nigerian National Petroleum Company Limited (NNPCL) and Dangote Petroleum Refinery have commenced discussions on a potential agreement that would see crude oil transactions conducted in Naira rather than U.S. dollars.
This move, if finalized, is expected to strengthen local currency usage, reduce pressure on Nigeria’s foreign exchange reserves, and provide a more sustainable financial structure for crude supply to the refinery.
According to industry insiders, negotiations have progressed significantly, with both parties exploring a framework that aligns with global crude oil trading standards while promoting domestic economic stability.
A top official within the NNPCL, who spoke on the condition of anonymity, revealed that the proposed deal is part of broader efforts to enhance local refining capacity and reduce Nigeria’s reliance on imported petroleum products.
“The discussions are centered around ensuring a steady supply of crude oil to the Dangote Refinery, which is a critical asset for Nigeria’s energy security. A Naira-for-crude arrangement will not only boost local currency circulation but also ease the financial burden caused by dollar-denominated transactions,” the source explained.
Industry analysts believe this strategy could significantly impact foreign exchange demand, reducing pressure on the Naira in the long term. However, concerns remain about the implementation and whether Nigeria’s crude suppliers, many of whom operate in the international market, will accept local currency payments.
The Dangote Refinery, a 650,000 barrels-per-day facility, is one of Africa’s largest and is expected to be a game-changer for Nigeria’s downstream oil industry. Stakeholders are optimistic that the talks between the NNPCL and Dangote Group will yield a positive outcome, ensuring that the refinery operates at full capacity with a sustainable crude supply model.
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