The Crude Oil Refinery-owners Association of Nigeria (CORAN) has announced the conclusion of the Federal Government’s Naira-for-Crude initiative, which was designed to support local refineries.
The Naira-for-Crude program commenced in October 2024, aiming to alleviate currency-related challenges faced by local refineries in securing crude oil supplies. Under this arrangement, the Nigerian National Petroleum Company Limited (NNPC) was expected to supply 385,000 barrels per day (bpd) to the Dangote Refinery. However, the actual deliveries were inconsistent, leading to the Dangote Refinery seeking alternative sources, including imports from the United States.
In an interview with Nairametrics, the National Publicity Secretary of CORAN, Eche Idoko, clarified that the first phase of the Naira-for-Crude arrangement was scheduled to conclude in March, and it has now ended.
However, Idoko clarified that, contrary to speculation that the Nigeria National Petroleum Company Limited (NNPC) terminated the arrangement, the first phase of the Naira-for-Crude initiative has simply concluded.
He mentioned that the association is hoping for a renewal but has not received any communication from the federal government regarding that. He stated: “The Naira-for-Crude agreement was intended to end in March as the first phase, and it has concluded. We have not yet received any word from the government about its renewal.
About the Naira-for-Crude initiative
Last year, the Federal Executive Council (FEC) approved the Naira-for-Crude initiative in which local refineries will be supplied crude oil in Naira rather than dollars.
- This was aimed at stabilizing fuel pump prices and the dollar-Naira exchange rate.
- However, Nairametrics reported that the implementation of the initiative was inconsistent, causing local refineries to struggle for crude supplies to maintain operations.
The federal government stated that, during the approval of the initiative, local refineries were to be allocated 450,000 barrels of crude oil per day, with the Dangote refinery receiving 385,000 barrels per day (or 12 million barrels per month).
- However, documents seen by Nairametrics show that the Dangote refinery was allocated only 61,290 barrels per day in February 2025 under the Naira-to-Crude arrangement.
- In the whole of February, the refinery was allocated cargoes of 6.5 million barrels, while the allocation was reduced to 4.75 million barrels for March.
Local refiners said the inconsistency of the Naira-for-crude initiative disrupted crude supplies.
- Despite an increase in Nigeria’s crude oil production, the country still relies on imports due to local refineries’ inability to source sufficient feedstock domestically. The Dangote refinery, with a capacity to refine 650,000 barrels per day, has been forced to import crude oil from the United States to optimise its full capacity, given the lack of adequate local supply.
- Nairametrics reported that in 2024, Nigeria imported 47,000 barrels per day of U.S. WTI crude, with a significant portion allocated to the Dangote refinery. According to tanker-tracking data compiled by Bloomberg, Dangote Refinery received shipments of imported crude amounting to 358,000 barrels per day in December 2024.
- This situation has left Nigerians exposed to the volatility of the global oil market.
Source: Nairametrics
