Market News

MR Chinedu Okafor

• Nigeria is expecting an influx of imported petrol following the halt of the Naira-for-Crude initiative.
• Dangote Refinery's local production of petrol could be affected by the increase in imported petrol.
• Seven vessels carrying imported petrol are scheduled to dock at Nigeria's seaports.

Nigeria is looking at an influx of imported Premium Motor Spirit, popularly called petrol, following the halt of the Naira-for-Crude initiative. This denotes that local production of petrol, particularly by the Dangote Refinery, could take a hit.

As seen in a document from the Nigerian Port Authority, the Punch Newspaper, reported that between Monday, March 17, and Sunday, March 23, seven vessels carrying imported petrol are expected to dock at seaports around the country's borders.

The document also shows that these vessels are set to utilize three of Nigeria’s seaports, bringing in 115,000 metric tonnes, or 154.22 million liters, of PMS.

The increase in importation of petrol is a result of the Nigerian National Petroleum Company Limited’s (NNPC) decision to halt the Naira-for-Crude initiative, a deal that allowed local oil producers to buy crude in the country’s local currency.

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The halt of crude supplies in the local currency, according to some domestic crude oil refiners, is the most recent ploy to thwart the Dangote Refinery and reinstate the complete importation of refined petroleum products.

The Dangote refinery has in recent weeks decided to source more of its crude from foreign markets to cut down cost, including purchasing over three million barrels of crude from the United States since the beginning of the month.

The Dangote refinery was also forced to source crude from Equatorial Guinea, as well as gloss over the idea of selling its petrol in dollars.

Eche Idoko, the National Publicity Secretary of the Crude Oil Refinery-owners Association of Nigeria, explained that the deal's suspension undermines the efforts of all parties involved to attain national energy security.

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He said that some persons were upset by the Dangote's ongoing price reductions of fuel and that they just exploited monopoly negotiations to reinstate importation as a substitute, as seen on the Punch.

As recently as October 2024, a report by the Organization of Petroleum Exporting Company (OPEC), showed tthat Nigeria imported a higher volume of petrol in October compared to September, despite the country’s oil refining capacity.

Dangote refinery

However, by January 2025, reports indicated that Nigeria's petrol imports reached their lowest level in eight years, thanks to the operations of the Dangote Refinery. Shipments to Nigeria averaged around 110,000 barrels per day between January 1 and 24.

This, coupled with the fact that Dangote’s fuel price reductions, which were said to be offsetting the bottom line of oil importers in the country is the basis for the accusation that some players in the Nigerian oil market are trying to frustrate the efforts of the Dangote Refinery.

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In an interview with Forbes, the head of the Refinery, Nigerian billionaire, Aliko Dangote, spoke about this fight with what he described as the oil mafia.

“The oil mafia is more deadly than the one in drugs because, with the oil mafia, there are so many people that are involved,” Dangote said to Forbes.

Despite stating that he never loses a fight, Dangote also relayed that the oil mafia are masters of ‘moving things,’ despite the perception of victory.

“You might be wining and dining with them, but these are the guys that are the masters of moving things around.”

Naira-for-crude debacle with the Dangote Refinery

The Nigerian National Petroleum Company (NNPC) Limited recently discontinued its Naira-for-oil program, which involves selling crude to regional refineries in the nation's currency.

The report that the NNPC had forward-sold all of its crude, even though production levels were greater now than when the arrangement started almost six months ago, served as the basis for the decision.

"Forward-sold all its crude" indicates that the Nigerian National Petroleum Company (NNPC) Limited has already sold future petroleum output ahead of schedule, maybe in order to meet contractual commitments, pay off debts, or obtain quick cash.