NNPC Says It Supplied All Available Naira Crude to Dangote Refinery Amid Supply Dispute

The Nigerian National Petroleum Company Limited says it has supplied 100% of all available crude oil cargoes allocated under the Federal Government’s naira-for-crude initiative to the Dangote Petroleum Refinery, insisting there has been no withholding on its part.

The clarification comes after a top Dangote Group official exclusively told _The PUNCH_ that the refinery is receiving only 4 million barrels of crude monthly under the arrangement, far below the 13 million barrels anticipated following President Bola Tinubu’s directive in 2024.

Citing the shortfall, the refinery said it had switched from naira-denominated fuel sales to dollar transactions and would also ramp up exports of refined products to earn foreign exchange.

*NNPC: “No Withholding, We’ve Met Our Obligations”*

Responding on Monday, NNPC spokesperson Andy Odeh said the company had fully discharged its obligations under the policy.

“As a 7.25% equity shareholder in Dangote Petroleum Refinery and Petrochemicals, NNPC Limited has a direct and genuine interest in seeing the refinery operate at full capacity. That is not in dispute,” Odeh said.

He added that context matters:  

“Under the naira-denominated crude supply arrangement, NNPC Limited has allocated 100% of all available naira crude cargoes to DPRP in 2026 — there has been no withholding on our part. Actual off-take in any period is shaped by variables such as crude availability, nomination timelines, and the refinery’s own operational scheduling.”

Odeh further stated that engagement with Dangote Refinery remains constructive.  

“NNPC Limited has met its 2026 supply obligations to the refinery. Where any gaps exist, we are resolving them together — as partners. A fully supplied, fully operational Dangote refinery serving the Nigerian market is an obligation NNPC Limited shares without reservation,” he said.

*Dangote: “Volumes Are Inadequate”*

The Dangote Group, however, maintains that the volumes supplied are insufficient to sustain naira-denominated fuel sales.

A senior official, who spoke on condition of anonymity, said crude supply under the arrangement has been capped at 4 million barrels per month despite an increase in national production.

“Since traders have brought in a lot of imported products, we are focusing on exports. We can’t and shouldn’t be fighting government policy,” the official said.

When asked if prioritizing exports over domestic supply was in the country’s interest, the official replied:  

“Is issuing massive import licences and releasing forex for imports good for the country, when 45% of our production can meet 100% of the entire country’s requirements for petrol, diesel and aviation fuel?”

On NNPC’s claim of increased supply, the official said:  

“Do you think they will keep quiet if we process the naira crude and export the products? We are getting just four million barrels monthly.”

Under the new arrangement, the refinery said it will process all crude received under the naira deal and supply equivalent refined products in naira to the Nigerian market through NNPC.  

“We will account for every barrel of crude we receive against the naira payment by supplying equivalent products in naira. We will do that through the NNPC. The NNPC buys a lot from us,” he added.

The pricing shift follows last week’s announcement of a new dollar-denominated template: petrol at $0.779/litre, diesel at $1.087/litre, and aviation fuel at $0.942/litre ex-depot. 

Marketers have criticized the move, warning it could push prices up. The Nigerian Midstream and Downstream Petroleum Regulatory Authority, however, said the pricing aligns with the Petroleum Industry Act, which allows refiners to recover costs.

*Supply Worsens in Abuja, Depots See Rush in Lagos*

Petrol supply in the Federal Capital Territory worsened on Monday. Several major stations, including NNPC Ltd and MRS outlets along Airport Road, were shut.

At stations dispensing fuel, prices ranged from N1,250 to N1,280 per litre. Bovas sold at N1,250/litre, while Azman and Salbas sold at N1,280/litre.

The development has heightened concerns over cost and availability in Abuja, forcing motorists into longer searches for fuel.

In Lagos, truck traffic has surged at private depots as marketers scramble for supplies. This follows five consecutive days of suspended loading at Dangote Refinery, amid expectations that wholesale prices could rise when operations resume.

*Expert: Dollar Pricing is About Risk, Not Necessarily Higher Prices*

Prof. Wumi Iledare, Professor Emeritus of Petroleum Economics at FUPRE Energy Business School, said the refinery’s dollar pricing reflects global market realities rather than just currency preference.

“Crude oil, the refinery’s major feedstock, is traded in US dollars. Pricing refined products in dollars reduces exposure to exchange rate volatility and provides revenue certainty, though it shifts FX risk to marketers and consumers,” Iledare explained.

He noted the move does not automatically mean higher pump prices.  

“Domestic prices will now track two variables more closely: international crude prices and the naira-dollar exchange rate. If crude rises or the naira weakens, prices go up. If they fall, prices should also adjust downward. That’s how a market-based system should work.”

Iledare added that the refinery has improved energy security by cutting dependence on imported PMS, but affordability will still depend on exchange rate stability, logistics, and downstream competition.

“The refinery can shield Nigeria more from supply shocks than price shocks. Domestic refining improves security, but cannot fully insulate us because crude has an international opportunity cost whether refined in Lagos, Rotterdam, or Houston,” he said.

On the naira, he said dollar pricing alone won’t weaken the currency.  

“What matters is whether the arrangement increases or reduces Nigeria’s net demand for foreign exchange.”

He urged policymakers to focus on market efficiency rather than pricing currency:  

“The real issue is whether Nigeria’s downstream petroleum market meets the tests of efficiency, effectiveness, equity, and ethics. Those are the standards this should be judged by.”