March 24, (THEWILL) – Nigeria is in for a fresh foreign exchange crisis as the country gradually returns to increased importation of petroleum products which it had assured the world was over.
After decades of massive importation of petroleum products, the Nigerian National Petroleum Company Limited (NNPC) in November 2024 announced that it had finally ended the age-long practice.
It said the development is expected to save Nigeria as much as $10 billion in hard currency in-country annually, as the national oil company said it now buys from the 650,000 barrels per day Dangote Petroleum Refinery located in Lagos.
The spate of peak-optimism was anchored to the naira-for-crude deal with the Dangote Refinery which required NNPC to supply crude to Dangote Refinery and for Dangote to sell its refined products in naira.
The naira-based crude supply arrangement was greeted with a huge breath of relief among Nigerians who had borne the burden of high price of petroleum products amid acute dollar shortage. The devaluation of the naira in June 2023 worsened the situation and put the citizens under immense pressure with inflation shooting for the sky.
However, when Dangote announced the halt in naira-based crude supply recently, it became obvious that the nation would inevitably return to the days of relying on imported petroleum products which, inevitably, would disrupt the relative stability recorded in the forex market in recent times.
According to data by the Nigerian Port Authority on Thursday, March 20, seven vessels carrying imported petrol, are expected to berth at seaports along the nation’s borders between Monday, March 17, and Sunday, March 23.
These vessels carrying 115,000 metric tonnes representing 154.22 million litres of petrol will bring in products through three seaports to improve fuel supply nationwide: Tincan port in Lagos, the Lekki Deep Seaport in Lagos and the Calabar port in Cross River State.
This comes amidst the suspension of the naira-based crude supply deal between NNPC and local refiners including Dangote Petroleum Refinery.
Domestic crude oil refiners have accused the authorities of halting the naira-based crude supply deal to frustrate the Dangote refinery and bring back the full importation of refined petroleum products which put the Nigerian economy in a great peril.
The National Publicity Secretary of the Crude Oil Refinery-owners Association of Nigeria, Eche Idoko, disclosed that suspending the deal defeats the efforts of all stakeholders to achieve energy security in-country.
He accused those behind the unending bid for importation of petroleum products of attacking Dangote by alluding to him as a tough-minded monopolistic entrepreneur in order to trigger easy return to importation of the commodity.
Some stakeholders have pointed out that importation of refined petroleum products has continued scrumptiously with resumed pressure on the naira amid claim of the domestic refineries resuming production.
THEWILL recalls that the Nigerian Midstream and Downstream Petroleum Regulatory Authority recently stated that the country’s three operational refineries contribute less than 50 per cent of the nation’s daily petrol consumption, with the shortfall being filled with imported products. But current trends indicate otherwise.
An analysis of the NPA data revealed that the Dangote refinery imported 654,766 metric tonnes of crude oil recently.
The first shipment carrying 20,000 metric tonnes of PMS allocated to the West African Port Services berthed at the Dangote terminal on Monday, March 17, 2025. On the same day, two vessels conveying 20,000 metric tonnes respectively berthed at the Tincan and Calabar seaports.
This was followed by the arrival of a 20,000 metric-tonne Watson vessel on Thursday, March 20, at 3:18 pm. It berthed at the Ecomarine terminal and was handled by a Kach maritime agent.
Similarly, a Binta Saleh ship was scheduled to berth at the Tincan port in Lagos carrying 5,000 metric tonnes of imported petrol on Friday, March 21 at midnight.
On Saturday, March 22, another vessel carrying 15,000 metric tonnes of fuel was billed to berth at the Calabar port.
At the same port, a vessel carrying 15,000 metric tonnes of fuel will arrive at the Eco marine terminal on Sunday at 5:10 pm. This means the seven vessels should bring in 115,000 metric tonnes. These constitute about 154.22 million litres of petrol.
“We are back to square one, Nigerians should be prepared for a hike in petroleum products, especially petrol, and a rapid depreciation of the naira,” said Mike Alilonu, a petroleum product transporter. Alilonu told THEWILL that the temporary relief seen in lower pump price of petrol and the stable naira in the forex market is over. He noted that there will soon be a mad rush for dollars as marketers resort to imported petroleum products to meet domestic consumption requirements.
The naira has shown a sign of steep depreciation since February. 2025. Last Friday’s session saw naira close at N1,580/$ per dollar in the parallel market, down from N1,590/$ on Thursday, despite the bullish dollar index in the global financial market.
Concerns are rising about the impact of the naira-based crude supply halt amid increase in dollar demand. Bureau De Change (BDC) operators are struggling with a shortage of foreign exchange, according to Aminu Gwadabe, president of the Association of Bureau de Change Operators of Nigeria (ABCON), who voiced the concern amid dwindling foreign exchange inflow.
The Federal Government stated its goal to increase that significantly by about 1 million barrels per day in the next two years, but oil theft and pipeline vandalism make such optimism almost impossible to achieve, casting a bleak outlook on the naira.
However, the Nigerian naira’s relative stability in the first quarter helped the recent decline in Nigeria’s inflation rate. NBS data revealed the country’s inflation rate moderated to 23.18 per cent in February from 24.48 per cent in January, marking the first slowdown in 2025.
Lower energy prices, a stable naira, and the rebasing of Nigeria’s inflation index all contributed to the decline.
However, the apparent end to the naira-based crude supply is seen triggering a rush for dollars among petroleum marketers and other stakeholders, who now face the prospect of purchasing products in U.S. dollars.
With the deal now coming to an end, there are fears that if local refineries, including Dangote, are forced to source crude in dollars, production costs could rise significantly.
This shift could put additional pressure on the naira and ultimately lead to an increase in petrol pump prices.
Meanwhile, depot owners have continued to effect an increase in the loading cost of petrol and other refined petroleum products at their depots.
According to reports on Thursday, March 20, Rainoil Depot increased its price from N835 to N860 per litre, and MEN depot effected an increase to N860 per litre despite not making sales the previous day.
Pinnacle Depot made a similar price change from N835 to N860 per litre, while Aiteo and Nipco changed their prices to N856 and N860 per litre, respectively, from N835.
The trend points to imminent renewed pressure on the naira as the country grapples with the failure of NNPC in meeting the demands of local refineries as the national oil company claims it has already committed its crude to forward supplies up to 2030.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
