The Nigerian National Petroleum Company Limited (NNPC) has signed a two-year crude oil supply agreement with the Dangote Refinery, to be settled in naira.
NNPC’s chief corporate communications officer, Andy Odeh, confirmed the development in a statement. The agreement, signed in August, ensures a steady supply of crude to the 650,000-barrel-per-day Dangote Refinery in Lekki, Lagos.
“In line with the FGN Crude for Naira initiative, NNPC Limited has continued to allocate crude to Dangote Refinery in naira for the sale of products in the domestic market,” the company said.
According to NNPC, the deal involves periodic reconciliation between the oil firm, the Dangote Petroleum Refinery and Petrochemical (DPRP), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), covering the volume and value of products supplied in naira against crude delivered.
Under the arrangement, NNPC allocated three crude cargoes to the refinery in August and five cargoes each for September and October. The agreement followed the intervention of the Naira-for-Crude Technical Committee chairman, after Dangote Refinery briefly suspended petrol sales in naira.
The deal comes amid ongoing tensions between Dangote Refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). The union recently directed members to cut gas and crude supply to the refinery over the mass dismissal of Nigerian workers. Efforts by the federal government to mediate between the parties ended in deadlock on Monday.
