The Nigerian National Petroleum Company (NNPC) Limited has discontinued its naira-for-crude oil arrangement with Dangote Petroleum Refinery and other local refineries, a move that could lead to higher petrol prices.

With this decision, local refineries must now purchase crude oil from international suppliers and pay in dollars instead of naira, increasing production costs and potentially affecting fuel pump prices.

Sources familiar with the situation disclosed that NNPC has already forward-sold all its crude oil despite increased production since the program’s inception on October 1, 2024. The initiative, designed to boost local refining and reduce reliance on imported fuel, will reportedly remain suspended until at least 2030.

A top industry insider confirmed the development, stating, “NNPC has notified Dangote Petroleum Refinery and other local refiners that it will no longer provide crude oil to them, as it has forward-sold all of its crude supplies until 2030.”

Critics have condemned the decision, arguing that it contradicts expectations of lower fuel prices. “At a time when Nigerians are hoping for further price reductions, NNPC unilaterally decided to end the naira-for-crude initiative,” a concerned source remarked.

The Dangote refinery has yet to issue an official statement on the matter, but an insider indicated that the company is reviewing its options.

The naira-for-crude policy was initially backed by the Federal Executive Council (FEC), which approved the allocation of 450,000 barrels per day for domestic refining, with 385,000 barrels designated for Dangote. However, NNPC has faced criticism for failing to meet its supply commitments.

Analysts warn that the latest development could destabilize the foreign exchange market, potentially reversing recent gains in the naira’s value.