The Naira-for-Crude initiative has ignited a profound debate in Nigeria’s economic landscape, yielding tangible results, such as the consistent drop in petrol prices. It is a development warmly received by many citizens.
Meanwhile, the Federal Government’s influence on petrol prices demonstrates its authority, even as it raises fundamental questions about the interplay between state power and economic dynamics. If successfully implemented, the initiative could foster economic stability, diminish foreign currency dependence, and redefine Nigeria’s economic trajectory. However, a pressing question lingers: should these price drops translate to a reduced cost of living?
The main thing about the Naira-for-Crude initiative is that it was thought of at all. For that, the Bola Tinubu-led government, which thought of it, deserves immense credit for conceptualizing this initiative! Such is the low level of policy formulation, not to mention implementation, in Nigeria.
That said, a key point is to examine the opportunity cost of the initiative, which is crucial to consider. By selling crude in naira to producers, credit leads to a loss of foreign exchange that could have been earned to shore up Nigeria’s perennial balance of payments crisis. This is a significant consideration. In spite of this, the government was correct to focus on value-added local production, which can accelerate real sustainable development and boost value-creating exports. This kind of forward-thinking is exactly what Nigeria needs, and the government deserves commendation for this initiative.
Obviously, we are not just talking about crude here; we are also talking about its derivatives, which are crucial for local manufacturing production and have export potential. This initiative presents a win-win situation! Properly implemented, it can transform Nigeria into a regional aviation hub for West, Central, and even East Africa. The gains will be phenomenal, with significant ripple effects on the aviation industry, including improved pricing, earnings and local job creation. The Federal Government’s efforts are truly commendable!
Another significant development is the healthy competition among major market players, which can drive efficiency and productivity, ultimately benefiting consumers. Nonetheless, this competition also raises concerns about potential market manipulation and the need for effective regulation. The government’s role in ensuring fair competition and regulating the market is therefore crucial.
At a time like this, the role of key stakeholders, such as Aliko Dangote, Africa’s richest nan, and Zacch Adelabu, the Executive Chairman of the Federal Inland Revenue Service (FIRS), cannot be overstated. Dangote’s involvement in the initiative has been particularly noteworthy, given his company’s market position. If he hadn’t taken the risk to build such a massive refinery, the Naira-for-Crude initiative might not have been conceptualized, let alone succeeded. In light of this, Dangote deserves significant praise, especially considering the internal opposition he faced from those benefiting from the status quo.
Going forward, this strategic approach of leveraging local competitive advantage for sustainable development and consumer benefits should be extended to other Dangote products, such as cement and sugar. The key point though is that it must be implemented with a clear and fair-trading focus. Again, this raises important questions about corporate social responsibility and the distribution of benefits and costs. Impliedly, if Dangote benefits from increased sales and revenue, it can be argued that he has a responsibility to share some of these benefits with consumers.
This brings to mind the clear reservations and murmurs of disaffection about the prices of many essential goods in Nigeria. The question that must be faced and answered is whether these prices are determined by competitive market forces or by cartels, reminiscent of the ‘robber barons’ who dominated the US economic landscape about 150 years ago. It took President Theodore Roosevelt, who took office in 1901, to initiate policies that eventually curbed the monopoly power of the John D. Rockefellers, the Andrew Carnegies, and the Andrew Mellons.
A striking example of the destructive effect of cartels and monopolies is how Rockefeller’s interests hindered the growth of electric cars. In the early 1900s, electric vehicles dominated the scene, with very few cars running on premium motor spirit (PMS). Rockefeller, controlling a significant portion of the oil refinery industry, needed outlets for his fuel and leveraged his influence over state governments to suppress electric cars.
As president, Roosevelt championed government regulation, conservation and social justice, earning him a reputation as a progressive leader. Roosevelt, in particular, publicly accused Rockefeller’s Standard Oil of criminal acts, and in 1911, the US Supreme Court ruled that Standard Oil had violated the Sherman Antitrust Act. Of course, it’s because of Rockefeller that we are seeing electric cars as a new phenomenon. It is actually older than the PMS dominance. Nigeria should learn from this in building a more positive, productive and sustainable political economy.
Drawing parallels from history to contemporary times, this piece would be incomplete without giving great credit to Adedeji, who also doubles as the Chairman of the Technical Sub-Committee on Domestic Sales of Crude Oil and Refined Products in Naira, and his team. Again, the key point here is that his background in the private sector brings a fresh perspective, distinct from those who have spent their entire careers in the public sector. This diversity of experience enables Adedeji, a technocrat from Iwo-Ate, Oyo State, to approach challenges with unique insights.
Adedeji’s unique blend of private and public sector experience serves as a valuable model for governments at all levels, including subnational and local governments. This approach has been advocated by many experts, who suggest adopting the French-type public service model, where civil servants gain experience in the private sector and NGOs to broaden their perspectives. Similar models are also applied, albeit to a lesser extent, in countries like Germany and the Netherlands.
The emergence of leaders like Adedeji and Taiwo Oloyede (Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms) offers no answers if the Nigerian political establishment cannot find a feasible way to adapt a model that has shown tangible benefits. Given the excellent efforts of individuals like Adedeji, it is imperative to adopt a model that marks a decisive and irreversible break from an underachieving past. Failing to do so would be tragic!
The Naira-for-Crude initiative can be seen as a strategic move to reconfigure the state-economy relationship, even as it raises important questions about power dynamics, economic systems, and the distribution of benefits and costs. The government’s decision to sell crude oil in naira is an exercise of sovereign power, aiming to shape the economic environment to its advantage.
This move has potential benefits, such as promoting economic stability, reducing foreign currency dependence, and boosting the government’s legitimacy. However, it also requires careful consideration of potential consequences, including the impact on the naira’s value and economic instability. In the end, by fostering stability and predictability, the government can create a conducive environment for economic growth and development.
Building on this momentum, Tinubu’s leadership in reshaping the state-economy dynamic is noteworthy. His administration has taken significant steps, including approving crude oil sales in naira to reduce dependence on foreign currency and stabilize the naira, as well as implementing economic reforms like removing fuel subsidies, which has saved over N1 trillion for the country.
Additionally, the President has engaged with stakeholders like Dangote to address challenges and introduced initiatives to support micro-, small-, and medium-scale enterprises, including a N75 billion credit facility. However, the success of these efforts hinges on securing natural resources and promoting private sector participation. The role of private sector players will be essential in driving investments and promoting economic growth. Overall, Tinubu’s leadership, policy, and effective implementation will be crucial to the initiative’s success.
May the Lamb of God, who takes away the sin of the world, grant us peace in Nigeria!
The Naira-for-Crude policy, designed to ensure the affordability and sustainability of petroleum supply, has sparked a fierce debate among experts. While supporters believe it strengthens the naira and boosts local refinery capacity, critics warn it could destabilise the currency and deter foreign investment. As the policy ends today, its future remains uncertain, with stakeholders divided on whether it should continue or be abolished. Assistant Editor MUYIWA LUCAS delves into the differing perspectives on this contentious issue.
The Naira-for-Crude policy was designed to support the domestic consumption of petroleum products. According to the government’s vision, the policy aimed to ensure a stable supply and optimise the use of local refining capacity. Additionally, it sought to eliminate the challenges associated with sourcing foreign exchange for petroleum imports. Proponents believed that the policy could enhance economic sovereignty and strengthen the local currency. Launched in October 2024, the policy was initially set to run for six months, with the final day scheduled for March 31.
However, just two weeks before the policy’s expiration, a major beneficiary—Dangote Refinery—announced that it would cease selling petrol in naira to the domestic market. This shift was due to the refinery no longer receiving crude oil in naira, but instead being left to refine oil that it imported using dollars. In response, the Nigerian National Petroleum Company (NNPC) Limited acted quickly, stating that it was in talks with Dangote and other local refiners. NNPC reaffirmed that the agreement was for an initial six-month period and subject to review.
Since the Naira-for-Crude policy’s implementation in October 2024, NNPC reported that it had supplied Dangote Refinery with over 48 million barrels of crude oil. As the policy’s end approaches, Zacch Adedeji, the Chairman of the Technical Sub-Committee on Domestic Sales of Crude Oil and Refined Products in naira, emphasised that the arrangement with local refineries had not been discontinued. However, recent developments may signal the conclusion of the policy.
Terms of sale and the debt burden
A key clause in the agreement stipulates that the sale of crude oil in naira is contingent upon the availability of the commodity. However, with the country facing challenges in meeting its production targets, fulfilling domestic obligations has become increasingly difficult. Under the Petroleum Industry Act of 2021, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had, earlier in the year, provided an estimate of the crude oil requirements for local refineries in the first half of 2025. This projection was aimed at ensuring effective capacity utilization of the nation’s domestic refineries through a consistent supply of crude oil.
According to the NUPRC’s forecast for the first half of 2025, the country’s crude oil production is expected to average 2,066,940 barrels per day (Bopd). Of this, the Commission estimated that local refineries would require 770,500 barrels per day (Bopd), which represents approximately 37 per cent of the projected daily production.
“This strategic initiative aligns with Nigeria’s commitment to bolstering its domestic refining capacity and ensuring the sustainability of its oil industry. The first half of 2025 is expected to witness increased synergy between local refineries and producing companies, setting the stage for a more robust and self-reliant petroleum landscape in Nigeria,” the NUPRC Chief Executive, Gbenga Komolafe said.
Stakeholders have raised concerns over the potential abandonment of the Naira-for-Crude policy, especially given that the government is aware of the projected crude oil allocation requirements. Furthermore, the claim of insufficient crude oil for domestic consumption is questionable, considering the clear provisions and guidelines established under the Domestic Crude Supply Obligation (DCSO) by NUPRC. The DCSO is a regulatory framework requiring oil-producing companies in Nigeria to allocate a portion of their crude oil production for domestic refining. This provision ensures a steady supply of feedstock to local refineries, bolsters national energy security, and aligns with Section 109 of the Petroleum Industry Act (PIA) 2021.
Introduced to guarantee a continuous supply of crude oil to domestic refineries, the DCSO aims to reduce Nigeria’s reliance on imported refined petroleum products, enhance local refining capacity, promote the growth of the downstream sector, and stabilise the domestic market. The NUPRC is tasked with enforcing this obligation. The allocation of crude oil for local consumption under the DCSO is determined through a mathematical model that considers factors such as the National Domestic Crude Supply Requirement (DCSRn), the company’s production forecast (Prodi), the national production forecast (Prodn), the company’s Technical Allowable Rate (TARI), and the national Technical Allowable Rate (TARn). For Joint Ventures (JVs), the model is adjusted based on the equity participation of each partner.
Each year, the NUPRC sets the percentage of crude oil allocated for domestic supply based on refining capacity, market demand, and government policy directives. Operators are notified of their obligations under the DCSO biannually, typically on January 1 and July 1. Although the Commission is not responsible for setting the price of crude oil supplied to the domestic market—since upstream activities operate under a deregulated pricing framework as outlined in Section 109 of the Petroleum Industry Act (PIA)—it does ensure that pricing remains fair and reasonable. According to the PIA, pricing is to be determined on a willing buyer, willing seller basis. However, to maintain transparency and fairness, the Commission requires producers and refiners to submit their monthly cargo pricing offers to the Commission.
The provision further stipulates that the pricing of domestic crude oil must align with Section 109 of the PIA 2021 and be based on international benchmarks. Adjustments may be made for factors such as logistics, quality differentials, and regulatory requirements. While the pricing operates on a willing buyer, willing seller basis, in cases of pricing disputes, the parties involved must bring the matter to the NUPRC for resolution. The provision also allows oil companies to export any remaining crude oil after fulfilling their DCSO obligations.
Sources suggest that the unsustainability of the policy is largely linked to several crude-backed loan commitments undertaken by the Nigerian National Petroleum Company (NNPC) Limited, among other factors, which have significantly contributed to the policy’s challenges. The NNPCL’s involvement in crude-backed loan commitments dates to 2019, with a total estimated amount of approximately $22.465 billion in loans to be settled. These agreements include a $750 million vendor financing programme and a $1.5 billion agreement, which expired in May 2023 and November 2024, respectively. Additionally, there is a $3.3 billion emergency crude repayment loan, secured in August 2023 and underwritten by Afreximbank through Project Gazelle Funding Ltd (PGFL), a special purpose vehicle (SPV) incorporated in the Bahamas. This loan was financed upfront by Afreximbank, Oando Plc, and Sahara Energy.
Other notable commitments include a $1 billion crude-backed loan issued during liquidity constraints, a $2 billion loan for Project Leopard, and a $7.5 billion loan for Project Gazelle II, all of which are scheduled for full repayment in January 2029 and April 2034, respectively. Further, NNPCL has other significant loan obligations, such as a $3 billion financing deal for NLNG Train 7, which matures in May 2029; a $1 billion loan for Project Eagle, due in June 2025; and a $300 million loan for Project Brogue, due in January 2027. Additionally, Project Bison—a $1.04 billion credit facility obtained by NNPCL—will mature in December 2026, while the $1 billion Project Yield is set to mature in June 2029. The company also has a $75 million offtake financing arrangement, which is due in October 2029.
There are ongoing discussions within the federal government regarding a new forward sale agreement, which is expected to extend until 2034. This proposed deal is largely driven by Nigeria’s urgent need to settle the Central Bank of Nigeria’s (CBN) outstanding obligations, including $3.2 billion, with $1.2 billion of this amount due in Eurobond yields in 2025. Given the significant financial commitments of both the NNPCL and the country—largely denominated in dollars—stakeholders argue that it is economically illogical for crude oil, which is priced in dollars on the international market, to be sold in naira. The Chief Executive Officer of the Major Energies Marketers Association of Nigeria (MEMAN), Clemet Isong, contended that the forward sales agreements entered into by the NNPCL have resulted in a reduction of the volume of crude oil allocated for domestic consumption.
“You cannot sell what you don’t have. There is no quota set aside for domestic consumption again because we do not have it. Set aside from who? From your own or from the IOC’s own? From who’s own? You don’t have; it’s just not there,” he said.
Isong, who has over 40 years of experience in Nigeria’s oil and gas sector, explained that for such a policy to be both effective and efficient, the country must significantly increase its crude oil production capacity to a level well beyond its current requirements. He further pointed out that, given the NNPC’s heavy debt burden, every dollar earned becomes crucial for debt repayment and ensuring the company’s survival. As a result, the allocation of crude oil for domestic consumption could be significantly impacted.
Implications of halting policy
The future of the policy—whether it continues or is suspended—has sparked a divide among stakeholders and economists. Some argue that the policy is heading in the right direction, while others view it as a potential disruptor to the country’s economic stability. Meanwhile, some critics attribute the situation to policymakers selectively favouring regulations or laws that align with their interests at any given time. From the perspective of those in favour of the policy, its discontinuation could have significant macroeconomic consequences. They fear that suspending the policy may place additional demand pressure on the foreign exchange market, potentially destabilising the prices of commodities that have been gradually stabilising.
Dr. Muda Yusuf, an economist and Chief Executive of the Center for the Promotion of Private Enterprise (CPPE), warned that halting the Naira-for-Crude policy would be a “disturbing development” as it would fundamentally alter the dynamics of petroleum product pricing. “It will significantly change the dynamics of domestic petroleum products pricing. The sustainability of the widely celebrated deceleration of petroleum products prices is now evidently at risk. We may see a reversal of the trend.
“There are other macroeconomic implications. For instance, the demand pressure on the forex market would be elevated, resulting in an exchange rate depreciation scenario. The foreign reserves may come under pressure. All of these could result in adverse macroeconomic outcomes with profound implications for investors’ confidence,” Yusuf warned.
Industry analyst Mayowa Sodipo argued that the question of whether to continue the Naira-for-Crude policy should never have arisen for several reasons. He pointed out that the policy has led to a reduction in petrol prices, fostering greater competition in the market. Furthermore, he noted that it has strengthened the Naira on the international market, as refiners no longer need to use foreign currency to purchase crude oil for their refineries.
Prof Omowumi Iledare, an expert in petroleum economics at the Emmanuel Egbogah Foundation in Abuja, explained the benefits of the policy, stating that it fosters an environment for economic expansion. “One you are thinking of the likelihood of expanded economic outfit in the economy; secondly you are thinking in terms of increasing job creation because now you are using your naira, which is the currency that you are going to use to recover the product that you are selling. It is even to government’s benefit that comes with the naira purchase of crude because it is going to increase the country’s revenue because tax will be taken on the production of the crude that they are using in the domestic economy and the influence of fluctuation in foreign exchange will be diminished,” Prof Iledare explained, adding that “also, the royalty on the oil production for the local refinery will be paid in naira.”
The emeritus professor further argued that the policy helps the Central Bank manage money supply in the economy, as the pressure on the exchange rate often stems from the demand for foreign exchange to import petroleum products. However, he acknowledged that there should be concerns, as this could potentially impact the country’s foreign reserves. He described the policy as “novel” and pointed to other countries that have successfully implemented similar measures. For example, India and China have used their local currencies to conduct international transactions within their own borders, and it has proven successful for them.
“Nigeria would have been the poster child in Africa where we begin to establish the need to use local currency to pay for factor of production; but now we are backing out because there are perhaps certain (and I might be wrong) certain individuals that in the short run seems to be affected. Again, perhaps the NNPCL might be losing the market share in the downstream of wholesale market structure because they may be thinking that the crude oil being sold to Dangote Refinery in naira is increasing its competitive advantage,” Prof Iledare argued.
However, the professor explained that market competition and the in terdependence on commodity pricing significantly influence the market dynamics. He emphasised that this is why industry regulators must advocate for all participants, including other local refiners and consumers. Nonetheless, he stressed the importance of understanding the fundamental workings of the market. On the other hand, stakeholders who advocate for discontinuing the policy often point to Venezuela’s failed attempt in the early 2000s to replace the dollar with its local currency for oil transactions. They argue that the effects of this policy contributed to severe economic instability in the country. These stakeholders caution that Nigeria must proceed with care and learn from historical precedents, as policies that disrupt established international trade norms without adequate safeguards can have unintended consequences.
Meanwhile, some players, such as the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), argue that the Naira-for-Crude transaction framework presents significant risks. They warn that it could destabilise Nigeria’s foreign exchange system and deter foreign direct investment (FDI). Additionally, they contend that the policy could exacerbate the volatility of the Naira against other international currencies.
Supporting its position, DAPPMAN argued that crude oil transactions are traditionally conducted in dollars due to the currency’s stability and global acceptability. They warned that, given the weakened state of the Naira, continuing the policy could alienate trade partners and investors who rely on the predictability and stability of the dollar. The Executive Secretary, Olufemi Adewole, cautioned that failing to align with the international standard of conducting crude oil transactions in dollars could isolate Nigeria from global markets, reducing trade opportunities and discouraging investment inflows.
He further explained that, given the naira’s instability—driven by inflationary pressures and fluctuating exchange rates—tying crude oil transactions to the Naira could exacerbate these issues. “The naira has experienced significant fluctuations over the years, driven by inflation and exchange rate instability. If crude oil transactions are tied to the Naira, these problems will only worsen, potentially triggering capital flight and causing foreign investors to seek alternative markets. This would negatively impact Nigeria’s economic growth, the sustainability of the sector, and the efficiency of the oil and gas value chain,” Adewole stated. He emphasised the need for policies that recognise the unique nature of the oil and gas sector to ensure the country remains competitive on the global stage.
Further outlining the reasons for DAPPMAN’s support for the discontinuation of the policy, Adewole argued that Naira-for-crude transactions could place an unsustainable strain on Nigeria’s foreign exchange reserves. He warned that the Central Bank of Nigeria (CBN) might struggle to maintain currency stability amid insufficient dollar inflows, which would only add to the country’s economic challenges.
“It is almost inevitable that implementing this policy could further deplete Nigeria’s foreign exchange reserves,” Adewole warned. “The CBN may find it increasingly difficult to stabilise the Naira due to inadequate dollar inflows. Since oil transactions have historically been a primary source of foreign exchange, disrupting this mechanism will likely intensify economic pressures.”
Despite this, DAPPMAN stressed the need to balance economic sovereignty with global market realities. “DAPPMAN supports all efforts and policies aimed at strengthening the Naira. However, these strategies must drive substantial economic reforms that address the root causes of the Naira’s weakness. Nigeria must find a balance between national interests and global market dynamics. Economic policies are most effective when they focus on long-term sustainability rather than being shaped by sector-specific demands,” he explained.
Reiterating the need for policies that align with international market standards while ensuring long-term economic stability, Adewole cautioned that the future of Nigeria’s oil and gas sector hinges on pragmatic policies that promote investment, foster transparent competition, and safeguard the country’s foreign exchange reserves. “By creating an environment conducive to private-sector participation, Nigeria can achieve a sustainable energy sector that benefits the broader economy,” he added.
On the other hand, Prof Omowumi Iledare emphasised that the price of petroleum products is directly tied to the price of crude oil. He argued that pricing crude oil in local currency could mitigate the impact of exchange rate fluctuations on petroleum product prices. “So, if crude is bought in dollars but petroleum products are sold in Naira, consumers would bear a double burden when crude prices rise,” he explained. “If the local currency is devalued, the final product’s price will also increase, leading to inflationary pressures. Because crude oil is a critical factor of production, changes in its price significantly affect the broader economy, which creates a dilemma — or even a trilemma — in terms of economic stability,” Prof Iledare concluded.
Purpose achieved or not?
Experts remain divided on the unfolding situation. While some warn of severe consequences if the policy is terminated, especially with a halt in local sales, others argue that the market may not be significantly impacted, given that the sector is deregulated. A recent market intelligence survey conducted by The Nation revealed that the savings from the retail price of petrol in the final month of the Naira-for-crude policy exceeded N113 billion monthly, or approximately N3.8 billion daily. This has provided more disposable income for households. The analysis, based on the average daily petrol consumption of 50 million litres, as indicated by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), also considered price changes by the two main petrol suppliers—Dangote Petroleum Refinery and Nigerian National Petroleum Corporation (NNPC) Limited. Dangote Refinery, which had been selling petrol at N925 per litre, reduced its ex-depot price twice last month, bringing the retail pump price down to N860 per litre. Following the competitive price cut, NNPC, which had been selling petrol at N945 per litre, also lowered its retail price to N860 per litre.
Dr. Yusuf praised the pricing efficiency as a positive development for Nigerians, noting that it has freed up more disposable income for households. He highlighted that this is one of the significant benefits of deregulation. While Yusuf acknowledged that global factors contribute to price reductions, he also pointed out that domestic factors have played a role, particularly the removal of several dysfunctional policies within the oil and gas sector and the foreign exchange market.
“These policies are bringing some efficiency into the market system, and it’s beginning to restore normalcy to the overall economic management. It’s a welcome development. Many of us commend this and hope that the trend continues. Closely related to this is the fact that we’re beginning to see stability in the foreign exchange market. This is another remarkable development that is positively impacting the declining and stabilizing prices of energy, particularly petroleum products.
“So, I think the trajectory is positive, and I hope the government will continue addressing these critical issues that affect citizens’ welfare. We expect to see this progress in other sectors as well—such as cooking gas, diesel, and aviation fuel. We’d like to see deliberate policies to make these improvements happen, because energy prices and exchange rates have been two of the biggest issues we’ve faced over the past year,” Yusuf, an economist, explained.
Conflict and the days ahead
However, these gains might be lost soon. Over the weekend, the Nigerian Economic Summit Group (NESG) raised concerns over the potential cancellation of the naira-for-crude policy, warning that the move could exacerbate Nigeria’s already fragile foreign exchange (FX) pressures. The cancellation of the policy, which was originally aimed at strengthening the naira, is seen as a step backward in Nigeria’s broader foreign exchange strategy.
The Group cautioned that scrapping the initiative could lead to even more significant challenges in managing Nigeria’s forex reserves, which have already been under strain due to fluctuating oil prices and low foreign currency inflows. “This cancellation is a misstep that could exacerbate Nigeria’s already precarious forex situation,” said Tayo Aduloju, the Chief Executive Officer of NESG, adding that the move might have unintended consequences for Nigeria’s currency and oil revenue dynamics.
According to Aduloju, NESG supports the crude-for-naira initiative, if transactions align with prevailing market rates and avoid creating a hidden foreign exchange subsidy. “It solved the issue of local production needs chasing forex. Imagine a big player like Dangote constantly chasing forex every day to buy crude—this automatically increases pressure in the market, and it can be disruptive. The journey is going nowhere to help anyone. So, we encourage the committee to revisit the broad framework,” the NESG explained.
Prof Iledare, however, noted that while the policy might be politically sound, it is economically challenging and could require negotiation rather than imposition. He suggested that it might only apply to government equity oil. “The biggest challenge with the PIA is selective implementation. There’s a difference between the letter of the law and the spirit of the law. When you begin picking and choosing from the law’s provisions, you’re likely to lose the intent of the law, and that’s what I’ve observed over the three years of implementing the PIA,” said Prof Iledare in a national television interview. According to him, the issue in the sector is not necessarily regulatory, but rather with policy formulation and implementation. “There must be a competent, transparent, and apolitical policy institution to formulate policies. The naira-for-crude policy could have been analysed with well-developed benefits, concerns, and a proper cost-benefit analysis,” he said.
The professor of petroleum economics stressed that understanding the price trend of petroleum products is crucial, as they are directly tied to crude oil prices. “If crude oil prices are volatile, petroleum product prices will also fluctuate. What we’ve done by attempting to use our local currency for crude oil transactions is like the passage of the local content law, which is working today. That’s why consistency and sustainability are key—it’s about ensuring access to affordable, available, and sustainable energy. This is the only way to grow the economy,” he stated.
He argued that policymakers must balance short-term challenges with long-term sustainability. “Some decisions require staying the course until optimal benefits are realised. Challenges bring opportunities, and that’s why we need a decision-making process, not just ad hoc responses to current situations. The naira-for-crude policy has only been in place for six months, and we haven’t even allowed it to fully play out so we can see its extreme benefits.”
The Tinubu Media Support Group (TMSG) yesterday said the Federal Government’s decision to make the naira-for-crude policy permanent is a sustainable solution to the cost of living crisis in the country.
The Chairman of the advocacy group, Emeka Nwankpa, made this known yesterday in Abuja, saying it would lay to rest the heightened anxiety that trailed the suspension of the policy at the end of the initial six-month arrangement with local refiners.
According to him, like all Nigerians, we saw how President Bola Tinubu’s approval of the sale of crude in naira to local refineries significantly reduced the cost of petroleum products from the Dangote Refinery at the outset of the policy.
“We also acknowledge that at the time it was introduced in October 2024, it was for six months in the first instance, subject to negotiations.
“But now the administration has made it a permanent key policy initiative which it said is designed to support sustainable local refining.
“This, for us, is a good development that will help conserve foreign exchange, especially as there will be no need for the use of dollars for domestic crude or petroleum products transactions.”
He added that more importantly, the policy would keep the pump price of fuel and other petroleum products stable.
“Invariably, this will guarantee energy security with a resultant positive effect on the cost of living in a country where prices of goods and services are tied to fuel prices.
“So, by ensuring that local refiners do not have to scramble for foreign exchange to buy crude, the government has effectively stalled the unnecessary increase in the pump price of fuel.
“We now expect oil marketers to take advantage of the new policy and ensure that it reflects in the pricing of fuel once the new policy takes full effect,” he further said.
Nwankpa expressed hope that the relief expected from the policy would translate to a reduction in prices of goods and services in the long run.
Fed. Govt.’s decision to retain the Naira-for-crude policy is a step in the right direction
It is a welcome development that the Federal Government has finally rested the contentions over the status of the Naira-for-crude deal between the government and the local refiners. At the end of the meeting conveyed by the Technical Sub-Committee on the Crude and Refined Product Sales in Naira initiative to review progress and address ongoing implementation matters, the stakeholders not only reaffirmed the government’s continued commitment to the full implementation of the strategic initiative, as directed by the Federal Executive Council (FEC), it also made clear that the initiative “is not a temporary or time-bound intervention, but a key policy directive designed to support sustainable local refining, bolster energy security, and reduce reliance on foreign exchange in the domestic petroleum market”. It noted in particular: “As with any major policy shift, the committee acknowledges that implementation challenges may arise from time to time. However, such issues are being actively addressed through coordinated efforts among all parties”.
Unfortunately, the clarification, though necessary and reassuring, could not be said to have been timely to fully reflect the urgency, let alone the strategic import of the issues at stake.
To begin with, even if we concede to the ‘implementation challenges’ as being a major factor in the deal as the committee is wont to put it, the point remains that none of these could be said to have sprung up overnight; in fact, we would have thought that the last six months (October 1, 2024 and March 1), when the initial deal operated, would have provided the committee sufficient time to make adjustments without the apprehensions that would later take root.
That the main parties – the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery and Petrochemicals did practically little to advance discussions outside of fulsome, but unproductive self-justifications and denials, mostly in the media, is disappointing enough. But even more so is the apparent inertia of the committee itself.
Yet, bad and unacceptable as the above ordinarily appears, the other imperative, which makes the ensuing tardiness confounding, is the apparent failure to anticipate its dramatic impacts, not just on the fuel pricing situation, but also on the exchange rate, together with the added pressure it brought on our foreign reserves. We say this because the very idea behind Naira-for-crude was not so much a matter of choice but an existential one. Here was a country which was hitherto bled to the tune of an approximately 40 percent of its entire crude revenue on fuel imports. Now, with the local refiner, Dangote Refinery finally on board, thus offering the country the golden chance to drastically cut down on its forex needs through the deal, and with it the additional guarantee of stable domestic fuel prices; that neither the committee nor the parties could seem to appreciate this emergency life-saver for what it is, thus allowing for the falling apart of what could have been a most promising deal, is worse than tragic. Now that the deal is said to be firmly back on track, our expectation is that the committee will act swiftly to remove all remaining encumbrances in the way. It is after all, the nation’s strategic interests that are at stake, particularly the welfare of the citizens and the health of the economy in the long term. Surely, this is not the time for the
parties to indulge in mind games for short-term advantages. If our understanding about initial deal being good for the country and the parties is any correct, it is hard to see how any further attempt to build on it would deliver anything less than a win-win for all. All that is required from the parties are good faith and utmost transparency.
The oil sector in Nigeria has always been the topic of the day. Online. Offline. On the radio. Even in public transport. If you want to start a heated conversation anywhere in this country, just mention “fuel.” The reactions will start coming in. The price. The scarcity. The queues. The corruption. It’s personal for everyone because we have built a whole nation that depends on oil as if it’s the only thing keeping Nigeria alive. We cannot discuss infrastructure, healthcare, education, or even pay salaries in many states without relying on oil revenue.
Before the removal of fuel subsidy under the current administration (President Bola Ahmed Tinubu), Nigeria was already burdened by an unsustainable level of debt. Year after year, billions were spent to maintain the appearance of affordable fuel.
This reality disproportionately benefited the wealthy and even some politicians while leaving the poor at a disadvantage. It was a system that forced the country to import what it could produce. In an attempt to correct this longstanding imbalance, the government introduced a new approach: the Naira-for-Crude policy.
The policy emerged as a response to Nigeria’s over-reliance on imported refined petroleum products, persistent FX pressures, and underutilized local refining capacity. It was approved by the Federal Executive Council to promote the sale of crude oil and refined petroleum products in Naira, specifically for domestic consumption, to strengthen local production, reduce dollar demand, and support broader reforms following the removal of fuel subsidies.
It is one of those things that sounds very technical on paper, but when you break it down, it’s about making Nigeria act like a country that actually owns oil. The idea is this: sell our crude oil to local refineries in Naira. Refine it. Sell the products within Nigeria, still in Naira. Not dollars. Not IOUs. Actual Naira transactions. No more running around trying to source dollars just to trade our own resources at home.
In August 2024, the federal government inaugurated the Implementation Committee for the Naira-for-Crude policy. The policy officially commenced on October 1, 2024, when the Nigerian National Petroleum Company Limited (NNPCL) began supplying approximately 385,000 barrels per day of crude oil to the Dangote Refinery, with payments made in Naira.
Many stakeholders are involved in the Naira-for-Crude policy. The Implementation Committee oversees its rollout, with Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), leading the Technical Sub-Committee.
The policy is built on four main principles: crude oil allocation to local refineries, transactions conducted in Naira, the Central Bank of Nigeria setting a reference exchange rate, and the Nigerian Ports Authority (NPA) overseeing the process through a One-Stop Shop for clearances and levies.
The Technical Sub-Committee ensures these principles are upheld while managing the regulatory process and aligning the policy with national objectives such as reducing reliance on foreign currency, achieving self-sufficiency, and maintaining market stability.
The Naira for Crude policy is meant to ease the burden on our economy while strengthening relevant sectors. For Nigeria, as a country, it reduces the pressure on the dollar, helps us save our foreign reserves, and makes room for a more stable financial system.
For stakeholders such as refineries, marketers, and government bodies, it simplifies how business is done, makes transactions easy, and encourages more investment. And for the everyday Nigerian, the goal is to ensure fuel is more available, reduce how much we rely on imports, and secure our energy needs in a way that actually works for us.
The naira for crude policy fosters a conducive business environment, reduces monopoly power, and ensures competitive pump pricing. It provides citizens with a strong sense of inclusion and the freedom to choose.
Naira-for-Crude makes a lot of sense. We have been doing things the hard way for too long, buying back what we produce and spending dollars we don’t have. This new policy is Nigeria finally saying, “Let us fix this from inside.” As mentioned earlier, It’s not just policy. It’s common sense.
The policy is a blueprint for the future. By changing how we handle our resources, we are taking back control. It’s time for Nigeria to move from just managing to thriving. We are doing it big, no going back!
Arabinrin Aderonke Atoyebi is the technical assistant on broadcast media to the executive chairman of the Federal Inland Revenue Service.
Dr Billy Gillis-Harry, National President, PETROAN, while reacting to recent development in the oil and gas sector lauded the Federal Government’s decision to continue the Naira-for-Crude policy.
The News Agency of Nigeria (NAN) reports that the Global Crude Oil is trading between 61 and 63 dollars currently.
Brent crude futures were down three cents, or 0.05 per cent, at 63.30 dollars a barrel by 0827 GMT while U.S. West Texas Intermediate crude futures were up two cents, or 0.03 per cent, at 60.09 dollars.
Brent and WTI are poised to register weekly declines of 3.5 per cent and three per cent respectively, having both lost about 11 per cent last week.
Brent dipped below 60 dollars a barrel at one point this week for its lowest since February 2021.
However, Gillis-Harry said the core reason for the global crude oil price drop was the weakening global demand due to economic slowdowns in major economies.
This, he said coupled with increased production from non-OPEC countries, leading to a supply glut in the market.
“This expectation is based on the understanding that local refineries will be able to produce petroleum products at a lower cost, which will then be reflected in the prices charged to consumers.
“Additionally, President Donald Trump’s recent policy of imposing reciprocal tariffs has also contributed to the decline in crude oil prices, as it has dampened global economic growth and led to a recession, further depressing oil prices.
“As the global crude oil price continues to fluctuate, PETROAN is optimistic that the Naira-for-crude policy will help to insulate the Nigerian economy from the volatility of the global market,” he said.
The Federal Government, through its Technical Sub-Committee on the Crude and Refined Product Sales in Naira initiative, announced on Wednesday that the initiative would continue indefinitely.
The move aims to sustain local refining, bolster energy security, and reduce reliance on foreign exchange in the domestic petroleum market.
Gillis-Harry said with the Naira-for-Crude policy in place, the benefits of lower global crude prices would be passed on to consumers, leading to more affordable fuel prices.
“By reducing the country’s dependence on foreign exchange and promoting local refining, the policy is expected to lead to greater stability in the downstream sector and more affordable fuel prices for consumers.
“With the Federal Executive Council’s directive to fully implement the policy, PETROAN is hopeful that the benefits of lower global crude prices will soon be felt by Nigerian consumers.
“The policy’s objectives include: Boosting Local Refining Capacity: Enhancing domestic refining and investment in infrastructure: Improving Energy Security: Strengthening Nigeria’s energy independence and reducing reliance on foreign exchange.
“It includes Stabilising Foreign Exchange Market: Decreasing dollar demand in domestic petroleum transactions,” he said.
He thanked all the Ministry of Petroleum Resources, agencies and stakeholders for championing roundtable talks aimed at ensuring petroleum products affordability and price stability in Nigeria.
Policy now permanent for energy security, end to reliance on forex in domestic market
Experts and industry stakeholders foresee a stable, affordable and competitive pricing of petrol with the return of the naira-for-crude policy.
The sale of crude in naira to local refineries initiated by the Tinubu Administration completed its six-month temporary arrangement on March 31.
Yesterday, the policy was restored permanently after a meeting of the technical committee.
“The Crude and Refined Product Sales in Naira initiative is not a temporary or time-bound intervention, but a key policy directive designed to support sustainable local refining, bolster energy security, and reduce reliance on foreign exchange in the domestic petroleum market,” a statement by the Ministry of Finance said.
Chief Executive Officer of the Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, hailed the return of the policy.
He said it was significant that the policy has come to stay.
The economist believes it will help conserve foreign exchange and drive investments.
He called for a replication of such policy in other critical sectors.
Yusuf said: “This is commendable and it is possibly an indication of the good things to come under the new leadership of the NNPCL with the support of the Coordinating Minister of the Economy.
“It makes sense from both an economic and nationalistic perspective.
“It is even more remarkable that the arrangement is being fully normalised as part of the overall economic management philosophy. It is no longer ad-hoc.
“This is about energy security, self-reliance, backwards and forward integration, multiplier effects and conservation of foreign exchange.
“Our plea is that the government should not spare any effort in the promotion of private investment in the economy.
“And this should be the norm for all sectors of the economy. It is not only a patriotic duty but also a fundamental responsibility of government.”
Yusuf noted the government’s role in stimulating growth.
“The role of government is to facilitate, not frustrate private investment.
“This is the pathway for sustainable economic growth and development,” he said.
President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harris, agreed that the policy would be beneficial.
He called on the authorities to “ensure that there is fair pricing and no untoward practice”.
The national publicity secretary of the Crude Oil Refinery-owners Association of Nigeria (CORAN), Eche Idoko, thinks the continuation of the naira-for-crude deal would stabilise the local currency and ensure cheaper petroleum products.
“We would want the naira for crude to continue.
“The idea of selling crude in naira is to achieve two things: ease the pressure on the naira and deliver cheaper petroleum products for Nigerians.
“If we are judging by these things, I think it is a no-brainer to say that the government has to continue in the naira-for-crude policy,” Idoko said.
Ministry explains policy
The ministry explained that the policy, which mandates the transaction of crude and refined petroleum products in naira, is structured to foster energy security, encourage investment in domestic refining infrastructure and strengthen economic sovereignty.
It is designed to enhance local refining capacity and stabilise the foreign exchange market by reducing the demand for dollars in domestic petroleum transactions.
“As with any major policy shift, the committee acknowledges that implementation challenges may arise from time to time.
“However, such issues are being actively addressed through coordinated efforts among all parties,” the Finance ministry said.
The technical committee is chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun.
A representative of Afreximbank, Hauwa Ibrahim, is the secretary.
Also at Tuesday’s meeting were the Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr. Zacch Adedeji, who heads the Technical Sub-Committee, and the Chief Financial Officer of NNPCL, Mr. Dapo Segun.
Others were the Coordinator of NNPC Refineries; management of NNPC Trading; representatives from the Dangote Petroleum Refinery and Petrochemicals; and senior officials from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Central Bank and the Nigerian Ports Authority (NPA).
The stakeholders reiterated their commitment to ensuring the successful implementation of the initiative.
It is believed that the policy, which aligns with the broader reform agenda, will support local content development, ease pressure on foreign reserves, and provide a more predictable pricing structure.
Stakeholders in the oil sector are in frenzied consultations to reinforce the stability of the downstream petroleum market as the initial six-month agreement for the enabling crude-for-naira policy ends this month.
Over the last couple of weeks, there have been apprehensions about the continuation of the policy, which led to the Dangote Refinery announcing a temporary suspension of sale of its premium motor spirit (PMS) or petrol, in naira to the domestic market.
While the Chairman, Technical Sub-Committee on the Naira-for-Crude Policy, Zach Adedeji, has said the policy would remain in place given its overwhelming benefit to the economy, there were concerns that continuation beyond the six-month period might require new approvals.
Under the naira-for-crude policy, the government consents to sale of crude oil to domestic refinery in national currency, with Dangote Refinery as the pilot case for the scheme.
“The naira-based crude sales framework remains intact. There are no plans to discontinue this important economic initiative. This framework promotes competitive pricing and efficiency in the domestic crude market,” Adedeji said.
In the last four months, the pricing mechanism of petrol has fluctuated downward, dropping to a recent low of N860 per litre at the retail pumps.
Stakeholders yesterday expressed concerns that while Nigerians appear to be enjoying the benefits of local refining and deregulation, stopping the policy could disrupt the market dynamics.
Decline in costs of logistics, particularly due to petrol-induced improvement in costs of transportation, was one of the reasons for the decline in the country’s overall inflationary pressure, as reported by the National Bureau of Statistics (NBS).
An industry analyst, Mayowa Sodipo, argued that the issue of continuation of the naira-for-crude policy should not even have arisen for several reasons. For instance, he noted that petrol price reduction has been induced by the policy which has encouraged competition. By extension, he argued that it has also strengthened the naira in the international market since refiners do not need to pay in foreign currency to buy crude oil for their refineries.
According to Sodipo, the industry regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), had given an idea of crude oil requirement by local refineries for the first half the year aimed at effective capacity utilisation of the nation’s domestic refineries by ensuring a consistent supply of crude oil.
According to him, going by the NUPRC projection of crude oil production in the first half of the year, which is estimated at 2,066,940 barrels of oil per day (Bopd), the Commission estimated daily crude oil requirement for local refineries to be 770, 500 (Bopd), representing about 37 per cent of the forecasted first half 2025 average daily production.
“This strategic initiative aligns with Nigeria’s commitment to bolstering its domestic refining capacity and ensuring the sustainability of its oil industry. The first half of 2025 is expected to witness increased synergy between local refineries and producing companies, setting the stage for a more robust and self-reliant petroleum landscape in Nigeria,” the NUPRC Chief Executive, Gbenga Komolafe said.
Yet, experts are of divergent views in the unfolding scenario. While some warned of dire consequences should the process be truncated, and leading to stoppage of sales to the local market as being considered by Dangote Refinery, yet, some are of the view that the market will not necesaarily feel the heat since it’s a deregulated market.
“It will significantly change the dynamics of domestic petroleum products pricing, should the policy on Naira-for-crude sale be stopped. The sustainability of the widely celebrated deceleration of petroleum products prices will evidently be at risk. We may see a reversal of the trend.
“There are other macroeconomic implications. For instance, demand pressure on the forex market would be elevated, which will result in an exchange rate depreciation scenario. The foreign reserves may come under pressure. All of these could result in adverse macroeconomic outcomes with profound implications for investors’ confidence,” said Dr. Muda Yusuf, Chief Executive officer, Centre for the Promotion of Private Enterprise, (CPPE).
An energy expert and industry analyst, Adeola Yusuf, agreed that Dangote Refinery has added to the variables affecting the pricing modulation as it has become one of the major players in the post-deregulation market.
He, however, noted that following President Bola Tinubu’s May 29, 2023 announcement of total deregulation of the downstream oil sector, petrol pricing has and will continue to get continuous adjustment.
Yusuf allayed the fears that following the refinery’s suspension of petrol sale in naira, an upward review of the price will hit the market. Rather, he argued, such upward review will only affect oil markets that buy from the refinery, who in turn adjust their price to reflect the cost at which they buy from the refinery.
“An upward review will be immediately imminent at filling stations of marketers that get supply from the Dangote Refinery if it adjusts its price and this will trickle down to filling stations that get supply from it. It may, however, be difficult to generalise the review at other stations that get supply elsewhere. Remember that this is a deregulated market; so consumers have a choice where to buy the products for depending on the price offering,” he argued.
The analyst further said: “It is important to note that the NNPC Limited remains the firm saddled majorly for the supply and distribution of the product in the domestic market. The present situation will have an effect on competition or what some Nigerians now see as beneficial price war that has ensued between Dangote Refinery and NNPC Limited, with the tendency of leading to a monopoly,” Yusuf explained.
But the issue of monopoly may not kick in anytime soon. This is because apart from local refining of the products, by virtue of the Petroleum Industry Act (PIA) of 2021, marketers are also free to import petroleum products irrespective of the product being locally refined.
Available data from the Nigerian Port Authority (NPA), showed a surge in petrol imports as marketers and retailers imported a total of 154.22 million litres of petrol into the country between March 17 to 23, 2025.
The data, obtained from the shipping position of released by the NPA, showed several vessels carrying 115,000 metric tonnes of PMS to have docked at various ports, including Tincan and Lekki Deep Seaport in Lagos and the Calabar Port in the period. Dangote Refinery imported 654,766 metric tonnes of crude oil in the same period.
The Major Energies Marketers Association of Nigeria (MEMAN), in its bulletin last week, reported that the landing cost of imported petrol dropped to N797. 66 per litre. According to the report, the on-the-spot rate at the NPSC-NOJ terminal dropped to N797.73 per litre from N817.9 charged in the previous week. It added that the average cost for 30 days also dropped to N851.76 from N854.15 per litre.
MEMAN also said the price of Brent crude was benchmarked at $70.58 per barrel — up from the $69.88 quoted on March 14.
“International Petroleum Product Pricing is currently experiencing significant volatility due to geopolitical and economic factors, including events in the Middle East, China’s market dynamics, seasonal variations, production status, and other global influences,” the report said.
“The foreign exchange rate remains fairly stable, with minimal fluctuations observed over recent periods.
“Landing cost, being fundamentally influenced by these elements, is likely to change several times intra-day. Savings can be achieved through negotiation, access to foreign exchange, and logistics efficiencies, eliminating STS where possible or receiving larger cargos,” MEMAN said.
Dangote Refinery’s also reduced at its loading gantry to N815 per litre from N825 per litre. On March 2, the Dangote refinery announced plans to refund oil marketers who purchased petrol rates higher than the advertised prices from any of its key partners. The refinery’s partners include AP (Ardova Plc), Heyden, and MRS Oil.
There is a raging concern that the Naira-for-Crude initiative, which ensures local refineries receive crude oil in Naira and sell refined products to marketers in the local currency, may be threatened over inadequate crude supply to domestic refiners, findings have shown.
President Bola Ahmed Tinubu had directed the sale of crude oil to Dangote in naira as part of move to bring down the cost of premium motor spirit (pms) otherwise known as petrol.
In October 2024, the Federal Executive Council (FEC) approved that 450,000 barrels intended for domestic consumption be offered in Naira to Nigerian refineries, with the Dangote Refinery acting as a pilot project.
Under the scheme which commenced in the first week of October 2024, the NNPCL was expected to supply 385,000 barrels of crude oil to the 650,000 bdp Dangote Refinery located in Ibeju-Lekki Lagos.
However, findings showed that there has been a consistent low supply of allocations to Dangote Refinery, forcing it to resort to importation.
Official documents reviewed by our correspondent revealed that while Nigeria’s crude oil production has marginally increased, exceeding 1.8mbpd, there has been a sharp decline in the volume of crude allocated to the Naira-for-Crude scheme.
The document revealed that for February 2025, the scheme has been allocated only four cargoes, and for March, just two cargoes totalling 950,000 barrels (1.9 million barrels in total for the month). This represents an allocation of 61,290 barrels per day – far below the 385,000 bpd target under the scheme.
The Dangote refinery is set to receive 12 million barrels of crude oil from the United States, as local supply constraints have hindered its bid to attain full refining capacity of 650,000 barrels per day.
Amidst this challenge, it was learnt that the Nigerian National Petroleum Corporation (NNPC) Limited and allied marketers continue importing petroleum products into the country, spending over N5 trillion on importing Premium Motor Spirit (PMS) and diesel (AGO) within 110 days.
An oil and gas expert in the public sector, who spoke on the condition of anonymity, warned that the Naira-for-Crude initiative might be undermined and threatened the potential for improving energy security in Nigeria.
He emphasised that these products, paid for entirely in Naira, are crucial to the government’s efforts to stabilise and strengthen the currency.
“The refineries pay fully for these products at international rates, but in Naira. The Dangote Petroleum Refinery and other domestic refineries then sell to marketers in Naira, thus eliminating currency or forex risks and reducing reliance on the dollar for domestic transactions.
By aligning domestic transactions with Naira payments, the government is effectively reducing Nigeria’s dependency on the US dollar, particularly in the oil sector, where a large portion of Nigeria’s foreign reserves has traditionally been spent on oil imports,” he explained.
He added: “Undoubtedly, its success is a testament to the visionary leadership of President Bola Tinubu and the Federal Executive Council, who, despite persistent opposition, have ensured its successful implementation. This initiative, which is critical to Nigeria’s ongoing economic reforms, must not be derailed”.
According to the motor tanker vessels report from the Nigerian Ports Authority, a total of 2,846,499.41 metric tonnes of PMS and 791,619.00 metric tonnes of diesel were imported between October 1 and December 31, 2024.
In addition, a total of 342,199mts of PMS and 146,866mts of AGO were imported into the country between January 1 and 29, 2025.
This equates to the importation of over four billion (4,276,044,567.81) litres of PMS and over one billion (1,103,658,360) litres of diesel within 121 days, using a conversion factor of 1,341 litres per metric tonne for PMS and 1,176 litres per metric tonne for AGO.
At an average landing cost of N940 per litre for PMS and N920 per litre for AGO, Nigeria has spent over four trillion Naira (N4.019 trillion) importing petrol and over one trillion Naira (N1.015 trillion) on diesel imports during the period.
This continued importation despite the huge local refining capacity is targeted at crippling local refineries, especially the Dangote Petroleum Refinery, another source said.
Oil and gas expert, Dr. Ayodele Oni in a chat with our correspondent, noted that despite improved crude oil production, the forward sale arrangements had made it difficult for the NNPC to fulfill obligations to the local refiners.
He stated that the divestment by the IOCs is also responsible for the challenge, saying there must be improved production to sustain the naira for crude scheme.
The expert however stated that it is strange that Nigeria continues to import so much despite the increased refining capacity through Dangote Refinery, Aradel, and the recently revived government-owned refineries.
A source at the Dangote Refinery who spoke on the condition of anonymity explained that in line with its commitment to serving Nigerians and keeping prices affordable, the refinery continues to sell products to marketers in Naira, while absorbing logistics costs to ensure uniform pricing across the country.
“The Refinery generously assumes equalisation status, which only the government does undertake. This has been met with enthusiasm by our partners, such as MRS, Heyden, and Ardova. The Petroleum Products Retail Outlet Owners Association has entered into an agreement with the refinery to distribute its PMS nationwide at a uniform price across all its filling stations,” he said.
