Faith Nyasuguta
The Dangote Refinery has turned to Equatorial Guinea to source crude oil, following complications in obtaining supplies locally. This move comes after the Nigerian National Petroleum Company (NNPC) Limited halted its Naira-for-Crude deal, which previously allowed local refineries to purchase crude in Nigeria’s local currency.
The NNPC’s decision has pushed local refineries, including Dangote, to source crude at international prices in US dollars rather than in naira. This shift poses financial challenges for refineries, prompting Dangote to explore more cost-effective options abroad.
In response, Dangote has increasingly turned to foreign markets to maintain operations. The refinery recently purchased over three million barrels of crude from the United States and, according to a report from Punch, has now secured its first cargo from Equatorial Guinea. The crude is identified as the country’s medium sweet Ceiba crude, a variety typically bought by China, with occasional shipments to Spain and the Netherlands.
The refinery’s recent purchase of 950,000 barrels from Equatorial Guinea aligns with a noticeable drop in fuel prices at Dangote’s loading gantry, where prices fell from ₦825 per liter to ₦815 per liter. Despite reports of additional shipments from NNPC, Dangote’s search for diverse crude sources continues.
This isn’t the first time Dangote has looked to other African nations for supply. In February 2025, the refinery acquired its first cargo of light sweet Saharan Blend crude from Algeria through trading company Glencore, with deliveries scheduled for March. These purchases signal Dangote’s growing strategy to secure crude outside Nigeria’s domestic supply chain.
The Naira-for-Crude Debacle
The shift to foreign markets is closely tied to the recent fallout between Dangote and NNPC over the Naira-for-Crude deal. This initiative previously allowed local refineries to buy crude in naira, easing financial pressures. However, NNPC halted the program earlier this month, citing that it had already forward-sold all its crude.
“Forward-sold” means NNPC has committed future oil production to buyers in advance, possibly to meet contractual obligations, manage debt, or secure immediate funds. The suspension of the Naira-for-Crude program left refineries like Dangote scrambling for alternatives.
NNPC spokesperson Olufemi Soneye defended the company’s actions, stating that Dangote had received over 48 million barrels of crude oil since the deal began in October 2024. He added that NNPC had supplied 84 million barrels to the refinery since its operations began in 2023.
As the dust settles, reports suggest ongoing negotiations between Dangote and NNPC for a new Naira-for-Crude deal, which could potentially ease tensions and stabilize the domestic supply chain.
For now, Dangote’s search for foreign crude highlights the refinery’s efforts to stay competitive amid shifting market dynamics. As the company explores diverse sources, including Equatorial Guinea and the U.S., the long-term impact of these decisions on fuel prices and Nigeria’s energy sector remains to be seen.
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