The Nigerian National Petroleum Company Limited (NNPC) has maintained that it supplied all available crude oil cargoes allocated under the Federal Government’s naira-for-crude initiative to the Dangote Petroleum Refinery, rejecting claims that it withheld crude from the facility.
The clarification followed claims by a senior official of the Dangote Group that the refinery had been receiving only four million barrels of crude oil per month under the arrangement, significantly below the approximately 13 million barrels envisaged after President Bola Tinubu’s 2024 directive.
The Dangote refinery recently attributed its decision to suspend naira-denominated sales of petroleum products and adopt dollar pricing to inadequate crude supply under the initiative, adding that it would increase exports of refined products to earn foreign exchange.
Responding on Monday, NNPC’s spokesperson, Andy Odeh, said the company had fully discharged its obligations under the policy.
“As a 7.25 per cent equity shareholder in Dangote Petroleum Refinery and Petrochemicals, NNPC Limited has a direct and genuine interest in seeing the refinery operate at full capacity,” Odeh said.
He stated that NNPC had allocated all crude cargoes available under the naira-denominated arrangement to the refinery in 2026 and insisted that there had been no withholding of supplies.
Odeh explained that actual crude deliveries depended on factors including crude availability, nomination schedules and the refinery’s operational planning.
He added that NNPC and the refinery remained in regular engagement to address any operational gaps.
“NNPC Limited has met its 2026 supply obligations to the refinery. Our engagement with DPRP management remains constructive, and where any gaps exist, we are resolving them together as the partners we are,” he said.
However, a senior Dangote Group official, who requested anonymity because of the sensitivity of the matter, maintained that the refinery had received only four million barrels of crude monthly despite increased national crude production.
The official said the refinery would expand exports of refined petroleum products while supplying the domestic market with products refined from crude received under the naira-for-crude arrangement 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,” the official said.
The source argued that inadequate crude allocations had made it impossible for the refinery to sustain naira-denominated fuel sales.
Last week, the refinery introduced a dollar-based pricing template, fixing the ex-depot price of petrol at 77.9 US cents per litre, diesel at 108.7 cents per litre and aviation fuel at 94.2 cents per litre.
The decision has drawn criticism from petroleum marketers, who warned that it could increase pressure on retail fuel prices. However, the Nigerian Midstream and Downstream Petroleum Regulatory Authority said the move was consistent with the Petroleum Industry Act, which permits refiners to recover their costs.
Fuel supply concerns
Meanwhile, petrol supply worsened in the Federal Capital Territory (FCT) on Monday, with several filling stations closing temporarily and pump prices rising.
Checks across Abuja showed that some NNPC and MRS filling stations along the Airport Road corridor were not dispensing fuel.
Stations that remained open sold petrol at between ₦1,250 and ₦1,280 per litre, with Bovas dispensing at ₦1,250 per litre, while Azman and Salbas sold the product at ₦1,280 per litre.
The development resulted in longer queues and increased concern among motorists over the availability and cost of petrol in the capital.
In Lagos, truck traffic increased around major private petroleum depots as marketers sought alternative supplies following the fifth consecutive day of suspended product loading at the Dangote refinery amid expectations of higher wholesale prices when operations resume.
Expert urges focus on market reforms
A Professor Emeritus of Petroleum Economics and Principal Facilitator at the FUPRE Energy Business School, Wumi Iledare, said the refinery’s decision to price petroleum products in US dollars should be viewed within the broader context of petroleum economics and Nigeria’s energy security.
He described the move as a commercial response to the reality that crude oil, the refinery’s principal feedstock, is traded internationally in dollars.
According to Iledare, pricing refined products in dollars reduces exchange rate risk for the refinery but transfers part of that risk to marketers and, ultimately, consumers where costs are passed on.
He said dollar pricing would not necessarily lead to higher fuel prices, explaining that domestic prices would instead become more closely linked to international crude oil prices and movements in the naira exchange rate.
“If crude prices rise or the naira weakens, pump prices are likely to increase. Conversely, if crude prices decline or the naira strengthens, consumers should also expect prices to adjust downward. That is how a market-oriented pricing system is expected to function,” he said.
Iledare added that while the Dangote refinery had strengthened Nigeria’s energy security by reducing reliance on imported petrol and improving product availability, domestic refining alone could not guarantee lower fuel prices.
He said affordability would continue to depend on exchange rate stability, international crude prices, logistics costs and competition within the downstream petroleum sector.
He urged policymakers to focus on creating an efficient and competitive downstream market rather than on the currency in which petroleum products are priced.
“The real issue is not the currency of pricing. The real issue is whether Nigeria’s downstream petroleum market satisfies the four tests of good public policy: efficiency, effectiveness, equity and ethics. Those are the standards by which this development should be judged,” he said.
