There is growing concern in the downstream segment of the oil and gas industry as operators await the Federal Government’s decision on the naira-for-crude agreement between the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Petroleum Refinery.
The six-month deal, which began in October 2024, officially concludes today, Monday, March 31, 2024. Discussions are ongoing about whether to extend or completely end the agreement.
However, sources revealed on Sunday that the committee overseeing the negotiations has not yet resolved. As a result, the uncertainty is now affecting the prices of refined petroleum products at the pump.
Petrol prices have risen from around N860 per litre to more than N930 per litre in just one week. Dealers have attributed this increase to the government’s failure to extend the naira-for-crude deal between NNPCL and the Dangote refinery.
Market analysts are forecasting further price hikes, with some predicting that petrol could reach N1,000 per litre in the coming weeks if the naira-for-crude deal, which previously helped to stabilize prices, is not renewed.
In the meantime, unless there is a last-minute change, the 650,000 barrels per day Dangote refinery is expected to shut down its petrol production unit for scheduled maintenance in June. The maintenance, expected to last 30 days, could exacerbate supply issues.
On the status of the naira-for-crude deal, an insider at the finance ministry, familiar with the negotiations, disclosed that little progress has been made. The source noted that there were no meetings held between the parties last week.
