The Federal Government has reaffirmed that its naira-for-crude policy with local refineries is a permanent fixture, not a short-term fix, describing it as a “core policy aimed at fostering sustainable domestic refining.” The government clarified that the initiative remains fully operational, overriding a previous decision by the Nigerian National Petroleum Company Limited (NNPCL) under former head Mele Kyari, which had set a limited duration for the program.
During a Tuesday meeting with Dangote Refinery representatives, Finance Minister Wale Edun confirmed the policy’s ongoing status. In July 2024, the Federal Executive Council (FEC) mandated the NNPCL to supply crude oil to Dangote Refinery and other local refineries in naira instead of U.S. dollars to ease pressure on foreign exchange reserves and stabilize fuel prices. However, in March 2025, the NNPCL announced that its naira-based crude sales agreement with Dangote was only a six-month arrangement, set to expire that month.
Consequently, Dangote Refinery paused naira-denominated sales of its petroleum products, citing a mismatch between its naira revenue and dollar-based crude purchase obligations. “This step was necessary to align our sales proceeds with our crude oil costs, which are still in dollars,” the Lagos-based $20 billion refinery explained. The halt triggered an immediate spike in petrol pump prices, jumping from roughly ₦860 to ₦1,000 per litre, forcing consumers to pay at least ₦70 more.
Dangote indicated it would resume naira-based sales once it received crude cargoes from the NNPCL in naira. Shortly after, President Bola Tinubu dismissed Kyari and the entire NNPCL Board, appointing an 11-member board led by Bashir Ojulari as Group CEO and Ahmadu Kida as non-executive chairman.
Analysts suggest that reinstating naira-denominated crude sales will alleviate pressure on the U.S. dollar and stabilize fuel prices, potentially reversing the recent price surge from ₦860 to ₦1,000 per litre in April 2025. With the policy back in place, Nigerians can anticipate some relief from the high costs of dollar-priced imported fuel.
