The decision of the Nigerian National Petroleum Company Limited to suspend crude supply to the Dangote and other refineries affected the output of the Organisation of the Petroleum Exporting Countries in March.

A Reuters survey found that OPEC oil output fell in March as Nigeria curbed deliveries to domestic refineries.

In March, supply from Nigeria, Iran, and Venezuela fell by 50,000 bpd each, the survey found.

Nigerian supply was said to have declined “due to reduced deliveries to the Dangote refinery, offsetting higher exports.” Reuters stated that Nigeria is pumping slightly above its OPEC quota.

In March, OPEC pumped 26.63 million barrels per day, down 110,000 bpd from February’s total, the survey showed, with Nigeria, Iran and Venezuela posting the largest drops of 50,000 bpd each.

Iranian and Venezuelan supply had dropped on renewed United States attempts to curb the flows.

The PUNCH learnt that NNPC delayed the delivery of seven cargoes of crude oil it allocated to the Dangote refinery last month.

A report by S&P Global said the supply was delayed by the NNPC over the failure of both parties to agree on payment terms.

The report disclosed that the cargoes were to deliver around 245,000 barrels per day in April. This amounts to 7.2 million barrels in 30 days.

“According to trade sources and Nigerian port authorities, NNPC has allocated seven crude oil cargoes to deliver around 245,000 barrels per day to the Dangote site in April but is yet to agree on payment terms,” the report stated.

The PUNCH gathered that the NNPC and Dangote have been embroiled in disputes over payment terms following the seeming termination of the naira-for-crude deal.

Aside from the seeming termination of the naira deal, it was gathered that the credit facilities given to Dangote were withdrawn.

Sources said the refinery is now expected to submit letters of credit before the delivery of crude cargoes.

An NNPC official declined to comment on the matter, saying transactions are not done in the open.

In October 2024, the NNPC began the naira-for-crude deal with the Dangote refinery as part of an initiative to deflate Nigerian fuel prices.

However, according to NNPC figures, the national oil companies delivered roughly 280,000 b/d of crude to Dangote in naira by March 10, falling shy of the 385,000 b/d agreed under the deal, S&P Global said.

As the six-month deal ended yesterday, there are growing concerns that the FG may not renew it, and this has caused a hike in fuel prices after the Dangote refinery announced the suspension of naira fuel sales.

However, in addition to foreign exchange shortages and debt concerns, NNPC is now battling new challenges with instability and pipeline sabotage in Rivers State, clouding its production outlook.

In contrast to government rhetoric, the Dangote executive expressed skepticism over whether a new naira-for-crude deal would go ahead.

“We are not even sure whether it will be renewed,” he said.

Besides challenges for NNPC, he argued that the obligation for Dangote to sell its oil products in naira under the deal had become a drag on its operations.

He said that the refinery was left exposed to price fluctuations by pegging contract prices to dollar-based benchmarks and converting them into naira at the point of sale.

Earlier, it was reported that crude oil grades from Nigeria faced tepid demand in the April trade cycle as ample availability of lower-priced alternatives such as US WTI, Caspian CPC Blend, and other Mediterranean grades enticed European buyers.

The report stated that the trade cycle has since shifted to May, “with as many as 15 April-loading Nigerian cargoes looking for buyers,” according to market participants quoted by Argus Media.

Meanwhile, the African Export–Import Bank, a key investor in oil and gas projects, has earmarked $3bn to finance the purchase of refined products within Africa as part of broader plans to boost refining capacity, a senior executive said.

Africa exports around 80 per cent of its crude oil and 45 per cent of the natural gas it produces, leaving the fast-growing continent heavily reliant on imported refined products, according to the bank and analysts.

According to Reuters, a lack of storage infrastructure and older refineries with relatively small output capacity characterize the energy landscape of sub-Saharan Africa.

In another development, crude prices slipped further on Tuesday as Brent fell to $63.23 per barrel and WTI to $59.82.

Experts said the downward trend of crude oil will impact negatively on the 2025 budget, which benchmarked crude prices at $75 per barrel.

However, it was argued that the crash would result in cheaper fuels at filling stations.