Share
Gbeminiyi Ogunleye
21 hours ago
Overview
WHY NAIRA-FOR-CRUDE POLICY IS BEST FOR THE ECONOMY
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 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’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.
