Dangote set to halt its fuel supply to the Nigerian market due to a standstill in the naira-for-crude agreement.

Dangote Refinery is poised to suspend the loading of petroleum products destined for the Nigerian market, following a deadlock in the renegotiation of the naira-for-crude deal.

Despite this setback, the refinery will continue its export activities, as it sources all its crude oil from the global market, conducting transactions in U.S. dollars.

The refinery has been engaging in transactions with Nigerian marketers using naira, having previously acquired crude oil in the local currency through a deal with the Nigerian National Petroleum Company (NNPC) Ltd. However, this arrangement has now reached its conclusion.

On March 10, the NNPC officially ended the naira-for-crude agreement with Dangote refinery and other domestic refineries.

Following this announcement, Olufemi Soneye, the chief corporate communications officer of NNPC, provided clarification that the existing agreement, which began in October 2024, is scheduled to wrap up at the end of March.

He also indicated that negotiations are currently in progress to forge a new naira-for-crude agreement with Dangote Petroleum Refinery.

However, Soneye disclosed that by October 2024, the NNPC had provided more than 48 million barrels of crude oil to the Dangote refinery. He further highlighted that since the refinery began its operations in 2023, the state-owned oil corporation has delivered a total exceeding 84 million barrels of crude oil.

In a collaborative effort, local refineries and the federal government have reached an agreement to conduct transactions for crude oil and refined petroleum products in naira.

This strategic move aims to enhance the supply chain, significantly cut down on the millions of dollars spent on importing petroleum products, and ultimately lead to a decrease in fuel prices at the pump.

By selling these products in the local currency, the initiative not only seeks to bolster the domestic market but also to create a more sustainable economic environment.

This approach is expected to streamline operations and provide relief to consumers by making fuel more affordable in the long run.