Fuel pump price increase looms as NNPC stops Naira-for-Crude Deal, Compelling Dangote, Others to Pay in Dollars
The Nigerian National Petroleum Company (NNPC) Limited has suspended the naira-for-crude oil swap arrangement, forcing local refiners, including Dangote Refinery, to pay for crude oil in dollars instead of naira.
The naira-for-crude deal, introduced on October 1, 2024, was designed to boost domestic refining, reduce reliance on imports, and ease forex pressures. Its abrupt suspension raises concerns about higher operational costs for Nigerian refiners, potential fuel price hikes, and increased pressure on the naira.
NNPC cited existing forward contracts as the reason for the halt, despite Nigeria’s rising crude output. Analysts warn the move could delay the Dangote Refinery’s full operations and undermine efforts to achieve self-sufficiency in petroleum production as well as lead to increase in petroleum pump price.
