The Federal Executive Council (FEC) has ordered the full implementation of the Naira-for-Crude agreement between the Federal Government and local oil refiners, a move aimed at strengthening Nigeria’s local refining sector and reducing the country’s heavy dependence on foreign exchange for petroleum.
This directive was made known in a statement posted on the official X (formerly Twitter) handle of the Ministry of Finance on Wednesday, titled “Update on the Crude and Refined Product Sales in Naira Initiative.”
The Naira-for-Crude policy, which allows local refiners to buy crude oil in naira instead of U.S. dollars, was introduced to encourage domestic refining and support the naira. The first phase of the deal began six months ago and involved key players like the Nigerian National Petroleum Company Limited (NNPC Ltd) and Dangote Petroleum Refinery. However, that agreement ended on March 31, 2025, and has not yet been renewed.
Following the expiration of the first phase, the Dangote refinery reportedly stopped selling refined petroleum products in naira due to the non-renewal of the agreement. This created some concern in the oil sector, especially among stakeholders who had hoped the policy would be a long-term strategy to support the economy.
In its latest statement, the Ministry of Finance stressed that the Naira-for-Crude initiative is not a temporary arrangement but a long-term policy direction. According to the statement, the Technical Sub-Committee on the Crude and Refined Product Sales in Naira held a review meeting on Tuesday to assess the progress so far and address some of the challenges facing the implementation.
The ministry said, “The stakeholders reaffirmed the government’s continued commitment to the full implementation of this strategic initiative, as directed by the Federal Executive Council.”
The statement further emphasized that the initiative is designed to support sustainable local refining, boost energy security, and reduce Nigeria’s reliance on foreign exchange in the petroleum market.
The Naira-for-Crude plan is seen by many as part of President Bola Ahmed Tinubu’s broader economic reforms, particularly his efforts to stabilize the naira, reduce the country’s import bill, and improve fuel availability locally.
Analysts believe that with consistent implementation, the policy could help Nigeria save billions of dollars in foreign exchange yearly and reduce pressure on the naira in the foreign exchange market.
However, others warn that without proper oversight and commitment from all parties, including the NNPC, the policy could face the same fate as past initiatives that failed to deliver results due to lack of follow-through and political will.
It is not yet clear when the agreement with Dangote Refinery and other players will be renewed, but the federal government’s fresh push to fully implement the deal suggests that talks are ongoing to bring refiners back on board under the new directive.
Industry experts say the policy, if well managed, could transform Nigeria’s downstream sector, create jobs, reduce fuel costs, and encourage further investment in local refining capacity.
Nigerians are now waiting to see how quickly the government can turn words into action and ensure that crude-for-naira becomes a functional and effective solution for the country’s lingering fuel and forex challenges.
