News Update
Experts and industry stakeholders foresee a stable, affordable and competitive pricing of petrol with the return of the naira-for-crude policy.
The sale of crude in naira to local refineries initiated by the Tinubu Administration completed its six-month temporary arrangement on March 31.
Yesterday, the policy was restored permanently after a meeting of the technical committee.
The Crude and Refined Product Sales in Naira initiative is not a temporary or time-bound intervention, but a key policy directive designed to support sustainable local refining, bolster energy security, and reduce reliance on foreign exchange in the domestic petroleum market,” a statement by the Ministry of Finance said.
Chief Executive Officer of the Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, hailed the return of the policy.
He said it was significant that the policy has come to stay.
The economist believes it will help conserve foreign exchange and drive investments.
He called for a replication of such policy in other critical sectors.
Yusuf said: “This is commendable and it is possibly an indication of the good things to come under the new leadership of the NNPCL with the support of the Coordinating Minister of the Economy.
It makes sense from both an economic and nationalistic perspective.
“It is even more remarkable that the arrangement is being fully normalised as part of the overall economic management philosophy. It is no longer ad-hoc.
“This is about energy security, self-reliance, backwards and forward integration, multiplier effects and conservation of foreign exchange.
“Our plea is that the government should not spare any effort in the promotion of private investment in the economy.
“And this should be the norm for all sectors of the economy. It is not only a patriotic duty but also a fundamental responsibility of government.”
Yusuf noted the government’s role in stimulating growth.
The role of government is to facilitate, not frustrate private investment.
“This is the pathway for sustainable economic growth and development,” he said.
President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harris, agreed that the policy would be beneficial.
He called on the authorities to “ensure that there is fair pricing and no untoward practice”.
The national publicity secretary of the Crude Oil Refinery-owners Association of Nigeria (CORAN), Eche Idoko, thinks the continuation of the naira-for-crude deal would stabilise the local currency and ensure cheaper petroleum products.
“We would want the naira for crude to continue.
“The idea of selling crude in naira is to achieve two things: ease the pressure on the naira and deliver cheaper petroleum products for Nigerians.
“If we are judging by these things, I think it is a no-brainer to say that the government has to continue in the naira-for-crude policy,” Idoko said.
Ministry explains policy
The ministry explained that the policy, which mandates the transaction of crude and refined petroleum products in naira, is structured to foster energy security, encourage investment in domestic refining infrastructure and strengthen economic sovereignty.
It is designed to enhance local refining capacity and stabilise the foreign exchange market by reducing the demand for dollars in domestic petroleum transactions.
“As with any major policy shift, the committee acknowledges that implementation challenges may arise from time to time.
However, such issues are being actively addressed through coordinated efforts among all parties,” the Finance ministry said.
The technical committee is chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun.
A representative of Afreximbank, Hauwa Ibrahim, is the secretary.
Also at Tuesday’s meeting were the Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr. Zacch Adedeji, who heads the Technical Sub-Committee, and the Chief Financial Officer of NNPCL, Mr. Dapo Segun.
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Others were the Coordinator of NNPC Refineries; management of NNPC Trading; representatives from the Dangote Petroleum Refinery and Petrochemicals; and senior officials from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Central Bank and the Nigerian Ports Authority (NPA).
The stakeholders reiterated their commitment to ensuring the successful implementation of the initiative.
It is believed that the policy, which aligns with the broader reform agenda, will support local content development, ease pressure on foreign reserves, and provide a more predictable pricing structure.