FG Sells N219.38bn Crude to Dangote Refinery in Four Months

The Federal Government sold crude oil worth N219.38 billion to the Dangote Petroleum Refinery between January and April 2025.

Meanwhile, the government earned $1.59 million from crude oil exports in April 2025, during a period when it had temporarily suspended domestic crude allocations to Dangote and other local refineries.

These figures were detailed in internal documents from the Nigerian National Petroleum Company Limited (NNPCL), submitted at Federation Account Allocation Committee (FAAC) meetings.

According to FAAC records, a total revenue equivalent of N2.53 billion was realised during the suspension period, based on an average exchange rate of N1,595.689 to the dollar, as provided by the Central Bank of Nigeria.

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On March 19, the Dangote Refinery halted the sale of petroleum products in naira following a deadlock in its naira-for-crude deal with NNPCL. The refinery cited a mismatch between its dollar-denominated crude oil purchase obligations and its naira-based sales revenue.

“Dear valued customers, we wish to inform you that the Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in naira… Our sales in naira have exceeded the value of naira-denominated crude we received,” the company stated at the time.

The halt pushed petrol loading costs at private depots in Lagos above N900 per litre.

Three weeks later, the Federal Executive Council ordered the full implementation of the naira-for-crude oil supply policy for local refiners, describing it as a strategic policy aimed at supporting sustainable local refining.

A government statement noted, “The Technical Sub-Committee on the Crude and Refined Product Sales in Naira initiative convened an update meeting to review progress and implementation issues. Stakeholders reaffirmed commitment to the policy’s full implementation.”

Despite this, the Dangote refinery has continued to report insufficient crude allocations, prompting increased reliance on imports from the United States to meet operational demand.

Data from NNPCL showed that nine cargoes, totalling 1,901,850 barrels, were delivered to the Dangote refinery. These were sourced from the Okwuibome field operated by Sterling Oil Exploration & Energy Production Company under Production Sharing Contracts, as well as from Nigerian Agip Exploration. Prices ranged from $74.87 to $80.34 per barrel, based on exchange rates between N1,501.22/$ and N1,562.91/$.

“The Dangote domestic lifting is payable in naira based on Afrexim Bank advised exchange rate,” one of the documents noted.

A monthly breakdown revealed crude oil sales to Dangote rose significantly: N17.52 billion in January, N32.95 billion in February, N56.97 billion in March, and N111.95 billion in April—a cumulative increase of over 538 per cent.

In contrast, the government earned N231.47 billion from crude oil exports over the same period. A total of $153.03 million worth of crude was sold to international buyers, with naira revenues reflecting exchange rate fluctuations.

January exports generated $31.13 million or N45.99 billion at N1,477/$; February’s $41.23 million yielded N61.50 billion at N1,491/$; and March’s $79.07 million brought in N121.44 billion at N1,535/$. However, April saw a dramatic decline to just $1.59 million, or N2.53 billion at N1,595/$.

Fuel marketers have since urged the Federal Government to introduce urgent interventions to prevent petrol and diesel prices from becoming unaffordable.

Hammed Fashola, National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), called for mechanisms to make fuel more affordable, especially for low-income earners. He advised that crude supplied to domestic refineries be sold at discounted rates to enable reduced pump prices.

“This is the time to take advantage of the Dangote refinery. The government needs to work closely with Alhaji Aliko Dangote. This is the time we need the naira-for-crude deal mostly,” Fashola said.

However, a source close to the deal hinted that the naira-for-crude arrangement may face challenges due to its misalignment with international crude trading standards.

Further details from the May 2025 FAAC document showed that 11,231,944 barrels of crude were exported in March, generating $1.59 billion in April receipts. In contrast, supply to local refineries like Dangote dropped to zero in April.

Gross revenue from oil and gas sales in April stood at $6.25 billion, or N1.01 trillion at the average exchange rate. Gas exports accounted for $4.56 billion, while arrears from NLNG feedstock gas brought in $6.13 million. Other receipts from crude oil and gas settlements contributed over $130 million.

Compared to March, most revenue sources declined significantly. Export Crude Oil receipts dropped 97.97 per cent—from N771.46 billion to N15.63 billion—while Domestic Crude receipts, which previously brought in N136.36 billion, recorded no inflows in April.

The Federation transferred N120.93 billion as total revenue in April, a 41 per cent decrease from N204.85 billion shared in March.