Nigeria is doubling down on its ambitious plan to conduct crude oil and refined product transactions in naira, a strategic push to bolster the nation’s economy, stabilize its currency, and reduce reliance on foreign exchange. The initiative, spearheaded by the Technical Sub-Committee on Crude and Refined Product Sales in Naira, is a cornerstone of President Bola Tinubu’s economic vision, aiming to enhance energy security and drive local value addition in the petroleum sector.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who chairs the committee, expressed optimism about the initiative’s progress during a recent meeting in Abuja. “This is a transformative step toward economic sovereignty,” Edun said, praising the seamless collaboration among key stakeholders. The meeting, attended by heavyweights from the oil and gas industry, reviewed significant milestones and outlined next steps for implementation.
Key attendees included Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS) and head of the Technical Sub-Committee; Olu Verheijen, Special Adviser to the President on Energy; and senior officials from the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Ports Authority (NPA), and local refining companies, including representatives from the Dangote Refinery.
The naira-for-crude initiative is designed to address Nigeria’s long-standing dependence on foreign currency, particularly the U.S. dollar, for energy transactions. By conducting these transactions in naira, the government aims to:
Stabilize the Naira: Reducing demand for foreign exchange is expected to ease pressure on the naira, which has faced significant volatility in recent years.
Boost Domestic Refining: The policy incentivizes investment in local refining infrastructure, such as the Dangote Refinery, which began producing petrol in September 2024.
Enhance Energy Security: By prioritizing local value addition, Nigeria seeks to reduce its reliance on imported refined products, ensuring a more stable fuel supply chain.
According to a statement from the Ministry of Finance, the committee has made “significant strides” since its inception. The Abuja meeting focused on refining implementation strategies and addressing logistical challenges, such as ensuring seamless naira-based transactions across the value chain. The involvement of the NNPCL, which controls Nigeria’s crude oil production and marketing, and regulatory bodies like NUPRC and NMDPRA, underscores the initiative’s comprehensive approach.
The Dangote Refinery, Africa’s largest, is a critical partner in the initiative. With a capacity to process 650,000 barrels per day, the refinery is poised to supply a significant portion of Nigeria’s refined product needs, reducing the country’s $20 billion annual import bill for fuel. Sources close to the committee confirmed that discussions are underway to ensure the refinery’s transactions align with the naira-based framework.
While the initiative has garnered widespread support, experts note potential hurdles. Nigeria’s foreign exchange reserves, which stood at $42.1 billion as of April 2025, remain under pressure, and transitioning to naira-based transactions could face resistance from international oil traders accustomed to dollar-based deals. Additionally, ensuring adequate naira liquidity and robust payment systems will be critical to the initiative’s success.
Despite these challenges, the government remains confident. “This is not just about economics; it’s about national pride and self-reliance,” Edun emphasized. The committee is expected to release a detailed implementation timeline by Q3 2025, with pilot transactions potentially commencing before the end of the year.
As Nigeria navigates a complex global economic landscape, the naira-for-crude initiative signals a bold commitment to reshaping its energy sector. By prioritizing local currency and domestic refining, the country is laying the groundwork for a more resilient and self-sufficient economy. With key stakeholders aligned and milestones already achieved, all eyes are on Nigeria to see if this ambitious plan will redefine its economic future.
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