DANGOTE REFINERY SEEKS EXPANSION OF NAIRA-FOR-CRUDE INITIATIVE

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By: Balogun Ibrahim

The Dangote Petroleum Refinery has stated that the Federal Government’s Naira-for-Crude policy has played a key role in stabilising the naira and should be expanded to serve Nigeria’s broader economic interests.

The newly appointed Managing Director of Dangote Refinery Plc, David Bird, revealed this during a press briefing at the Lagos refinery complex, where he provided an update on the company’s crude oil supply arrangements under the policy.

When asked about the effectiveness of the Naira-for-Crude programme and the refinery’s satisfaction with the current supply framework, Bird described the initiative as a clear demonstration of government support for domestic refining.

“I think it’s a great testimony to the level of government support that we get,” he said on Wednesday.

Bird stated that 30 to 40 per cent of the refinery’s current crude feedstock comes through the Naira-for-Crude arrangement, with monthly discussions between the refinery and the Nigerian National Petroleum Company Limited (NNPC) to determine suitable crude grades.

“Between 30 and 40 per cent of our current crude diet is on the crude-for-naira programme. We engage with NNPC monthly on the grades to purchase, as there is significant variability in Nigerian crude grades.

“We have preferences, a wish list, and continue to work with government support to ensure we receive the right allocations,” he explained.

Bird highlighted that although the refinery is optimised for Nigerian crude, supply volumes remain variable.

He explained that about 30 per cent of the refinery’s crude comes through the Naira-for-Crude programme, another 30 per cent is sourced from Nigerian crudes on the spot market, and the remaining 40 per cent is imported from international grades.

Despite the diverse supply mix, Bird said the refinery would support an expansion of the policy.

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“Certainly, we would always like to see the crude-for-naira programme expanded. Even at the current level five cargoes a month, for example; it has played a significant role in stabilising the naira,” he stated.

Bird added that the refinery has the capacity to handle additional crude volumes if allocations are increased, emphasizing ongoing discussions with NNPC and the Federal Government.

“We have the potential to take on further grades when available, and we continue to engage with NNPC and the government on increasing that supply,” he said.

He also highlighted global geopolitical uncertainties as a reason for prioritising domestic crude supply.

“It is in Nigeria’s interest to focus on domestic supply, given the volatile geopolitical landscape. For instance, if Venezuelan crude returns to the market, securing an offtaker through domestic refining becomes crucial for the country,” Bird explained.

Launched in October 2024, the Naira-for-Crude policy enables local refineries to buy crude oil from NNPC using naira instead of US dollars.

The initiative eases pressure on foreign exchange, cuts transaction costs, supports the stability of the naira, and bolsters domestic refining capacity.

Under the programme, refineries supply petroleum products to the Nigerian market in naira, helping to retain greater value within the local economy.