A high-ranking source at the Nigerian National Petroleum Company Limited (NNPCL) confirmed on Friday that crude oil vessels had been dispatched to the $20 billion Lekki-based refinery.
“All cargoes have been released to Dangote Refinery, and the vessels have sailed to the facility,” the NNPCL insider stated, speaking on condition of anonymity due to lack of authorization to address the media.
The delivery of the crude oil shipments had initially been delayed, with the cargoes remaining at sea last week due to uncertainties surrounding the naira-for-crude deal at the time. Officials of the Dangote Refinery had not responded to inquiries on the matter as of Friday.
Naira-for-Crude Policy Review
This development follows a meeting of the Technical Sub-Committee on the Naira-for-Crude Policy, held on Thursday in Abuja. The meeting aimed to evaluate recent developments, address emerging challenges, and reaffirm the commitment to the successful implementation of the policy framework.
The NNPC presented a report on crude oil deliveries allocated for domestic refining under the policy. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) provided a domestic production report covering the Dangote Refinery, NNPC’s Warri Refinery, and Port Harcourt Refinery. Meanwhile, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) updated stakeholders on crude oil availability for local refining, ensuring a steady supply for domestic refiners. Representatives from Dangote Refinery and NNPC Refineries also provided updates on their operations.
Renewal of Naira-for-Crude Agreement
Earlier reports by BrandIconImage revealed that the NNPC has initiated fresh negotiations with the Dangote Petroleum Refinery regarding the renewal of the naira-for-crude agreement. Talks are underway ahead of the expiration of the initial deal, which is set to conclude on March 31, 2025.
Downstream Competition Drives Price Reductions
A major oil marketer, who spoke anonymously, attributed the ongoing decline in petrol prices to fierce competition among stakeholders in the downstream sector. The marketer predicted that prices could soon fall below N800 per litre.
“Prices of gasoline (petrol) have continued to drop and may soon go below N800. While some attribute this to increased local refining capacity and the naira-for-crude initiative, the primary driver is the competition enabled by the deregulation of the downstream sector,” the marketer explained.
The marketer emphasized that deregulation has created a competitive environment, forcing local refineries to keep prices low to remain viable. However, they cautioned that prices could also rise in a deregulated market, underscoring the need for robust competition to maintain affordability.
“To ensure prices remain at their lowest possible level, it is essential to prevent any single entity from dominating the supply chain. Local refineries must be incentivized to keep prices low through limited and controlled imports. Additionally, local refiners can export excess production to earn foreign exchange,” the marketer added.
The marketer also urged the NMDPRA to monitor the quality of imported products and maintain a balance between local production, imports, and total consumption to ensure market stability.