Nigeria’s government initiative to sell crude oil priced in the local currency, the naira, has faced significant challenges, particularly in meeting the demands of domestic refineries.
The program, launched in October, aimed to alleviate foreign exchange constraints and boost local refining capacity. However, refiners, including the massive Dangote Oil Refinery, have reported inadequate supply.
Despite the government’s commitment to providing 385,000 barrels per day (bpd) to the Dangote refinery, actual deliveries have fallen short of expectations. Edwin Devakumar, head of the refinery, described the current supply as “peanuts.”
The Crude Oil Refinery-owners Association of Nigeria (CORAN) confirmed that only the Dangote refinery has benefited from the naira-denominated sales, while other refiners are still awaiting access to crude oil.
The reasons behind the shortfall remain unclear, with the state oil firm, NNPC, yet to provide an explanation.
To address the supply gap, the Dangote refinery has resorted to international markets, recently purchasing two million barrels of U.S. WTI Midland crude.
Meanwhile, NNPC is actively seeking new international buyers for its crude oil, including a new grade called Utapate.
As the government continues to grapple with these challenges, the future of the naira-priced crude sales program remains uncertain.