Anderson Cooper Talks: The Uncertain Future Of Nigeria's Naira-for-Crude Deal

What’s Next for Nigeria’s Naira-for-Crude Policy?

Let’s talk about the future of Nigeria’s Naira-for-Crude deal. Right now, it’s kind of like a chess game where everyone’s waiting for the next move. Sources close to the discussions say that all parties involved are getting ready to reconvene and figure out what’s next. This is a big deal, folks, because this policy has been a game-changer in more ways than one.

The agreement between the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Petroleum Refinery officially ended on March 31, 2025. And with that, the refinery stopped selling its refined petroleum products in Naira. But guess what? That doesn’t mean they’ve stopped processing crude oil. In fact, they’ve kept going strong, processing around 400,000 barrels per day so far this year. That’s a lot of oil!

Where’s the Crude Coming From?

Now, here’s the interesting part. About 35% of the crude oil being processed at the Dangote refinery isn’t coming from Nigeria. Instead, it’s being imported from places like Brazil and Equatorial Guinea. This is a pretty significant shift, showing that the refinery is finding ways to adapt to supply challenges here at home.

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A source familiar with the negotiations told The Punch that while the policy is being reviewed, its impact on the economy—especially fuel prices and the foreign exchange rate—can’t be ignored. They said, “This initiative isn’t going away anytime soon because it’s had a real impact—not just on fuel prices, but on other economic factors too.”

Why Was the Policy Created in the First Place?

Let’s take a step back for a moment. The Naira-for-Crude policy was introduced in October 2024 to reduce Nigeria’s dependence on imported fuel. The goal was to improve fuel supply and stabilize prices. It was a bold move, and for a while, it seemed to be working. But now, with no official agreement in place to extend the policy, things are a little uncertain.

Since the policy began, the NNPC has delivered 48 million barrels of crude oil under the arrangement. That’s impressive, but when you consider that the total supply since 2023 has been 84 million barrels, it’s clear there’s still a long way to go. A senior government official told us that the committee overseeing the policy is waiting for more recommendations from the Nigeria Upstream Petroleum Regulatory Commission before making any decisions. So, essentially, they’re holding their cards close to their chest for now.

Challenges Facing the Deal

Now, let’s talk about the challenges. Despite the best intentions, the Dangote refinery has faced some hurdles. One of the biggest issues has been NNPC’s inability to meet its supply commitments. According to data from the Commodity Analysis System (CAS), NNPC only delivered about a third of the 300,000 barrels per day it promised. That’s a pretty big shortfall, and it’s had a real impact on the refinery’s operations.

To compensate, Dangote has had to look elsewhere for its crude oil. For example, Petrobras in Brazil delivered a cargo of Tupi crude on March 26, 2025. A Dangote executive speaking to S&P Global admitted that there’s a lot of uncertainty about the future of the Naira-for-Crude deal. They said, “We’re not even sure if it will be renewed or if it will continue at all.”

And here’s the kicker: the Naira-based pricing structure isn’t exactly a money-maker for Dangote. The executive noted that it’s not commercially advantageous because the refinery is exposed to volatile exchange rates. They explained, “It’s risky when you’re buying and selling oil products in Naira because the prices can fluctuate wildly.”

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Dangote’s Global Pivot

With the deal’s future unclear, Dangote has started looking beyond Nigeria’s borders for its crude supply. Brazil’s Petrobras and Equatorial Guinea have joined the list of global suppliers for the refinery. This move highlights the strain between Dangote and NNPC, especially given NNPC’s struggles to deliver on its commitments.

The refinery’s decision to source crude internationally reflects the broader challenges of Nigeria’s domestic supply system. Political and logistical hurdles have made it tough to keep up with demand. As one Dangote executive put it, “We’re not just sitting around waiting for NNPC to figure things out. We’re taking action to ensure we can keep running smoothly.”

What’s Next for the Naira-for-Crude Deal?

As the negotiations continue, the future of the Naira-for-Crude arrangement remains up in the air. While NNPC is expected to supply crude oil to Dangote for April, the details—especially around payment terms—are still being worked out. Sources say NNPC has allocated seven crude oil cargoes for April, which will deliver around 245,000 barrels per day. But here’s the thing: the payment terms are still up for discussion.

In the meantime, everyone’s watching closely to see what happens next. Will the deal be renewed? Will it be modified? Or will Dangote continue to rely on international suppliers? Only time will tell, but one thing’s for sure: this is a pivotal moment for Nigeria’s energy sector.