The Nigerian National Petroleum Company Limited (NNPC) has confirmed that it is in active negotiations with the Dangote Refinery to establish a renewed crude oil supply contract, to be denominated in naira, as the current six-month agreement nears its expiration at the end of March 2025.
The statement, released on Monday, follows speculation surrounding the status of the existing deal. Addressing the rumors head-on, the NNPC clarified that there has been no termination of the current contract and that discussions are ongoing to secure a new arrangement under similar terms.
“Discussions are currently ongoing towards emplacing a new contract,” the company said, reaffirming its commitment to supporting domestic refining initiatives. “NNPC Limited remains committed to supplying crude oil for local refining based on mutually agreed terms and conditions.”
The agreement in question marks a significant step toward Nigeria’s broader efforts to reduce its dependence on fuel imports and strengthen the local energy value chain. The naira-for-crude model—where crude oil is supplied to the refinery in exchange for payment in local currency—has been hailed as a pragmatic approach to supporting local currency liquidity and bolstering domestic refining capacity.
Since October 2024, the NNPC has supplied over 48 million barrels of crude to the 650,000 barrels per day Dangote Refinery, which began operations in 2023. This brings the total volume delivered since the refinery’s launch to more than 84 million barrels, according to NNPC data.
The Dangote Refinery, situated in the Lekki Free Trade Zone near Lagos, is Africa’s largest oil refinery and a critical component of Nigeria’s energy infrastructure. The project, developed by the Dangote Group, is intended to drastically cut the country’s reliance on imported refined petroleum products and stabilize domestic fuel supply.
Industry analysts view the renegotiation of the naira-based supply deal as a litmus test for broader energy sector reforms in Nigeria, particularly those centered on currency localization, economic resilience, and value addition through local refining.
With the expiration of the current deal approaching, both parties are expected to finalize new terms that reflect evolving economic realities and reinforce Nigeria’s national energy strategy.
