The Federal Ministry of Finance has announced that the Crude and Refined Product Sales in Naira initiative (naira-for-crude) will continue, as stated in a release following a high-level meeting of the Technical Sub-Committee.
After months of suspension, the policy—which allows local refiners to purchase crude oil using the naira instead of foreign currency—is being reinstated as part of broader efforts to support local energy production, conserve foreign reserves, and stabilize the country’s refining capacity.
The statement issued by the Ministry reaffirmed the government’s decision to uphold the Crude and Refined Product Sales in Naira initiative as a long-term policy rather than a temporary response to recent disruptions in the petroleum industry caused by the earlier suspension of the initiative.
It read: “The Technical Sub-Committee on the Crude and Refined Product Sales in Naira Initiative convened an update meeting on Tuesday to review progress and address ongoing implementation matters.
“The stakeholders reaffirmed the government’s continued commitment to the full implementation of this strategic initiative, as directed by the Federal Executive Council (FEC).”
“Thus, 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.”
The Naira-for-crude deal and the Nigerian oil sector
The halt of Nigeria’s naira-for-crude initiative significantly impacted the oil industry, exacerbating existing challenges and hindering progress toward energy security and refining self-sufficiency.
The suspension led to increased reliance on foreign currency, higher operational costs for local refineries, stunted growth of local refining capacity, fuel supply disruptions, and increased pressure on the government.
The naira-for-crude disruptions significantly impacted the Dangote Refinery, one of Africa’s largest refineries. The disruptions led to a temporary suspension of petrol sales in naira due to a misalignment between revenue and crude oil purchase obligations, which are settled in U.S. dollars.
The Nigerian National Petroleum Corporation (NNPC) stopped selling crude oil to Dangote Refinery in naira, citing the end of their six-month agreement from October 2024 to March 2025.
This decision had a notable impact on fuel prices, as the naira-for-crude arrangement previously allowed Dangote Refinery to lower fuel prices, forcing NNPC to follow suit.
With the suspension, there were concerns that fuel prices would rise, as the Dangote Refinery might no longer have access to discounted crude previously secured through the naira-for-crude arrangement.
Without that cost advantage, refineries were likely to adjust prices upward, reducing competitive pressure on the Nigerian National Petroleum Company (NNPC) and potentially leading to a broader increase in pump prices nationwide.
