There is anxiety in the downstream arm of the oil and gas sector as operators await the decision of the Federal Government on the naira-for-crude deal between the Nigerian National Petroleum Company Limited and the Dangote Petroleum Refinery.
The six-month deal, which started in October 2024, officially ends today, Monday, March 31, 2024. The deal’s extension or complete halt is still being discussed by the parties involved.
However, it was gathered on Sunday that the committee responsible for the negotiations has yet to resolve on the matter. As this lingers, the effect is now felt in the pump prices of refined petroleum products.
Petrol has increased from about N860/litre to over N930/litre within one week. Dealers blamed this on the failure of the Federal Government to extend the naira-for-crude deal between the NNPCL and the Dangote refinery.
Our marketers also projected further hike in petrol price. They said the cost may hit N1,000/litre in weeks if nothing is done about the naira-for-crude deal that earlier helped in checking the rise in petrol prices.
Meanwhile, barring any last-minute change, the 650,000 barrels per day Dangote refinery is expected to shut down its petrol-producing unit for maintenance. According to Reuters, the maintenance, which may occur in June, will last for 30 days.
On the naira-for-crude deal, an insider at the finance ministry familiar with the ongoing negotiations revealed that no significant progress has been made. The source said both parties could not engage in any meeting throughout the past week.
“Nothing new has happened. Probably after the holidays, the committee will sit and meet,” the senior government official stated.
Recall that on October 1, 2024, the government commenced the sales of crude oil in naira to the Dangote refinery to improve supply, save the country millions of dollars in petroleum product imports, and ultimately reduce the pump prices of fuel.
