Nigeria’s state-owned oil company, NNPC Ltd, is in talks with the Dangote Oil Refinery to extend a crude supply contract paid in naira. The deal aims to support local refineries by ensuring a steady supply of crude oil.
The six-month agreement began in October and ends later this month. It was introduced to help refineries facing supply challenges. Under the deal, NNPC Ltd allowed refineries to buy crude in naira instead of relying on foreign currency. So far, the company has supplied 48 million barrels of crude to Dangote’s refinery.
The plan originally included seven smaller refineries, but only Dangote benefited. Even then, it did not receive the full volume agreed upon. This highlights ongoing difficulties in securing crude for local processing.
NNPC Ltd confirmed that talks are ongoing for an extension. However, details such as supply volume, pricing, and duration remain undisclosed.
The Dangote Oil Refinery, a $19 billion facility, can refine 650,000 barrels per day. It is expected to reduce Nigeria’s dependence on imported fuel. However, supply shortages and operational delays have slowed its impact.
Industry experts are closely watching the negotiations. A stable crude supply is key for local refiners to boost production and lower fuel prices in Africa’s largest oil producer.