The Federal Government has reaffirmed its commitment to the Naira-for-Crude Oil initiative, stating that the programme will continue despite the initial phase ending on March 31.
The Ministry of Finance announced this on Monday after a meeting with key stakeholders, including representatives from Dangote Petroleum Refinery and the Nigerian National Petroleum Company (NNPC) Limited.
Earlier when the policy was in place, it guaranteed cheaper petrol for consumers as the federal government sold crude to Dangote Refinery in naira instead of dollars. This situation led to increase in pump price shortly after the deal expired.
Key Takeaways
– Continued Commitment: The government reiterated its commitment to the full implementation of the strategic initiative, as directed by the Federal Executive Council (FEC).
– Implementation Challenges: The Committee acknowledged potential implementation challenges but assured that these issues are being actively addressed through coordinated efforts among all parties.
– Objectives: The initiative aims to support sustainable local refining, bolster energy security, and reduce reliance on foreign exchange in the domestic petroleum market.
Background
The Naira-for-Crude Oil deal commenced on October 1, 2024, to improve supply, save the country millions of dollars in petroleum product imports, and ultimately reduce pump prices.
However, there were reports that the NNPC had halted the deal until 2030 due to forward-selling all its crude oil, and the Dangote refinery temporarily stopped selling petroleum products in Naira to avoid a mismatch between sales proceeds and crude oil purchase obligations.
Next Steps
The government has assured that the initiative will remain in effect as long as it aligns with public interest and supports national economic objectives. With this development, stakeholders are eagerly awaiting further implementation and potential impacts on the energy sector.