Market News

BY  Aderonke Atoyebi

The oil sector in Nigeria has always been the topic of the day. Online. Offline. On the radio. Even in commuter buses. 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 is personal for everyone because we have built a whole nation that depends on oil as if it is 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 of 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 foreign exchange pressures, and underutilised 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 is 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 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 the Executive Chairman of the Federal Inland Revenue Service, Dr Zacch Adedeji, leading the technical subcommittee. 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 overseeing the process through a one-stop shop for clearances and levies.

The technical subcommittee 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 naira, 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 our reliance 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.

The naira-for-crude policy 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 do not have. This new policy is Nigeria finally saying, “Let us fix this from inside.” As mentioned earlier, it is not just policy; it is common sense.

The policy is a blueprint for the future. By changing how we handle our resources, we are taking back control. It is time for Nigeria to move from just managing to thriving. We are doing it big; no going back!

•Aderonke Atoyebi is the Technical Assistant on Broadcast Media to the Executive Chairman of the Federal Inland Revenue Service