Government Official Reveals That the Naira for Crude Policy Will Continue Because It Has Great Impact on Fuel Price and Other Economic Indices

The Federal Government’s naira-for-crude policy is expected to continue as officials recognize its significant impact on fuel prices and other economic indicators. The first phase of the six-month deal, involving the Federal Government, Nigerian National Petroleum Company Limited (NNPC), and Dangote Petroleum Refinery, ended on March 31, 2025. However, discussions are underway for its renewal, despite Dangote Refinery ceasing the sale of refined petroleum products in naira following the deal’s expiration.

Reports indicate that Dangote Refinery processed approximately 400,000 barrels per day of crude oil in 2025, with around 35% of the supply sourced from international imports. This translates to about 140,000 barrels per day and a total of 12.6 million barrels imported within three months. To diversify its supply, the refinery has begun sourcing crude oil from Brazil and Equatorial Guinea, reflecting concerns over domestic availability. The first shipment of one million barrels of Brazil’s Tupi crude was delivered on March 26, while shipments from Equatorial Guinea are anticipated soon.

Government sources affirm that the naira-for-crude initiative had a stabilizing effect on the foreign exchange market and fuel prices, making it a crucial economic strategy. The Nigeria Upstream Petroleum Regulatory Commission’s submission on the policy is awaited before the next steps are determined. The initiative, which started on October 1, 2024, aimed to improve crude supply, save foreign exchange on petroleum imports, and lower fuel pump prices.

NNPC disclosed that Dangote Refinery received 48 million barrels of crude oil in naira under the deal, with 84 million barrels supplied since the refinery commenced operations in 2023. While discussions for a new contract are ongoing, challenges persist, including NNPC’s failure to meet its supply obligations. It initially committed to delivering 385,000 barrels per day but fell short, providing approximately 280,000 barrels daily by March 10.

A Dangote executive expressed uncertainty over the renewal of the agreement, citing concerns about the commercial viability of selling refined products in naira while purchasing crude under fluctuating foreign exchange conditions. The refinery remains exposed to price volatility, as pegging contract prices to dollar-based benchmarks complicates financial planning.

Meanwhile, the Human Rights Writers Association (HURIWA) has urged President Bola Tinubu to ensure the continuation of the naira-for-crude arrangement. The group warned that terminating the policy could lead to sudden fuel price hikes, exacerbating economic hardships for millions of Nigerians. As the discussions progress, the policy’s future remains uncertain, but its impact on Nigeria’s energy sector and economy continues to be a subject of intense debate.