Naira-for-Crude Policy Shields Nigeria from Global Fuel Disruptions – Presidency

The Presidency has stated that Nigeria’s naira-for-crude policy is helping the country withstand the fuel supply shocks caused by the ongoing crisis in the Middle East.

Speaking on Wednesday, the Senior Special Assistant to the President on Media and Publicity, Temitope Ajayi, said the initiative introduced by President Bola Tinubu has ensured a steady supply of petroleum products despite disruptions in global energy markets.

Ajayi explained that the policy, approved in July 2024 and implemented from October 1, 2024, allows crude oil supplied by the Nigerian National Petroleum Company Limited (NNPCL) to be paid for in naira by the Dangote Refinery. He noted that this arrangement has boosted local refining capacity while reducing pressure on foreign exchange.

He added that the policy is being coordinated by a technical committee led by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, alongside the Executive Chairman of the Nigerian Revenue Service, Zacch Adedeji, and other stakeholders.

According to Ajayi, the policy has served as a buffer amid the escalating conflict involving Iran, Israel, and the United States, which has disrupted global energy supply chains. He pointed out that the situation intensified following Iran’s closure of the Strait of Hormuz, a key route responsible for more than 20 per cent of global oil and gas shipments.

“The disruption has led to a surge in global energy prices, putting pressure on many economies, especially those dependent on imports,” he said.

Despite the rise in global fuel prices, Ajayi stressed that Nigeria has avoided the severe shortages seen in other countries. He noted that while prices have adjusted to global trends, fuel remains available nationwide without widespread queues.

He attributed this stability to the Dangote Refinery’s production capacity, which has met domestic demand and positioned Nigeria as a supplier of refined petroleum products to other African countries, including South Africa and Kenya.

Ajayi also noted that the global crisis has exposed the vulnerabilities of countries heavily reliant on imported refined products, many of which are now facing supply disruptions and adopting emergency energy measures.

“In contrast, Nigeria’s investment in local refining is yielding results. The Dangote Refinery has increased output and prioritised local supply, ensuring consistent availability of fuel,” he said.

He further highlighted efforts to ease the impact of rising global oil prices on Nigerians, noting that the refinery recently reduced petrol prices by N75 per litre despite higher crude costs.

“This shows the advantage of local refining in cushioning price shocks and strengthening energy security,” Ajayi added.

Ajayi disclosed that Nigeria is also using the refinery’s capacity to support regional energy needs, with nearly 500,000 tonnes of refined products exported to African countries in March.

He emphasised that beyond stabilising supply in the short term, the naira-for-crude policy and increased local refining capacity are key to Nigeria’s long-term energy security and economic resilience.

“The Dangote Refinery is more than an industrial project; it is central to Nigeria’s energy independence and a driver of sustainable economic growth,” he said.