The report shows that Nigeria’s crude supply fell by 50,000 barrels per day (bpd) in March due to reduced deliveries to domestic refineries, particularly Dangote's, despite a rise in exports. Iran and Venezuela also recorded similar declines, resulting in a total OPEC output drop of 110,000 bpd, bringing overall production to 26.63 million bpd for the month.
According to S&P Global, the NNPC delayed the delivery of seven crude cargoes—about 245,000 bpd or 7.2 million barrels for the month of April—allocated to the Dangote refinery, due to a dispute over payment terms.
The two parties are reportedly at odds following the apparent termination of the naira-for-crude deal, which began in October 2024 as a strategy to ease fuel prices in Nigeria. Under the deal, Dangote was to receive 385,000 bpd, but only 280,000 bpd had been delivered by March 10, according to NNPC data.
Sources also indicated that credit facilities extended to Dangote have been withdrawn, and the refinery is now required to present letters of credit before future crude deliveries can proceed. An NNPC official, when approached for comments, declined, citing confidentiality in such transactions.
With the six-month naira-for-crude deal officially ended, concerns are growing about a potential non-renewal. This uncertainty has already triggered a rise in fuel prices after Dangote halted sales in naira. A Dangote executive confirmed the company’s uncertainty, saying, “We are not even sure whether it will be renewed.”
He added that the obligation to sell refined products in naira, while crude costs were pegged to dollar benchmarks, had put a strain on the refinery’s operations, exposing it to price fluctuations and conversion losses.
The situation is further complicated by foreign exchange shortages, debt challenges, and rising insecurity, including pipeline sabotage in Rivers State, which continue to threaten Nigeria’s oil production outlook.
Meanwhile, weak demand for Nigerian crude has persisted in the April trade cycle, with around 15 April-loading cargoes still seeking buyers. Market participants attribute this to the availability of cheaper alternatives like U.S. WTI, Caspian CPC Blend, and other Mediterranean grades, which have drawn the attention of European refiners.
In a broader African context, the African Export–Import Bank (Afreximbank) has earmarked $3 billion to support the purchase of refined products across the continent. The initiative aims to strengthen Africa’s refining capabilities, as about 80% of its crude and 45% of its natural gas are exported, leaving many countries dependent on imported refined fuels.
Adding to concerns, global crude prices continued to drop, with Brent falling to $63.23 per barrel and WTI to $59.82. Analysts warn that this could hurt Nigeria’s 2025 budget, which is based on a $75 per barrel benchmark. However, the price slump may also lead to lower fuel prices at petrol stations.
