The federal government (FG) has reaffirmed its commitment to supporting local refineries through the naira-for-crude oil swap arrangement.
This policy remains intact and plays a crucial role in enhancing domestic refining capacity.
Consequently, it ensures a stable supply of refined products.
This assurance follows recent reports indicating that the Nigerian National Petroleum Company (NNPC) Limited has suspended the naira-for-crude deal until 2030.
However, NNPC clarified that negotiations for a new agreement with Dangote Petroleum Refinery are currently ongoing.
The existing six-month arrangement, which began on October 1, 2024, will expire at the end of March.
In a statement issued on Monday, Zacch Adedeji, chairman of the naira-for-crude policy technical sub-committee, confirmed that the framework for selling crude oil in naira for domestic refining remains operational.
He dismissed speculation about discontinuation, emphasizing that local refineries still have access to domestic crude supplies under this policy.
“The policy framework enabling the sale of crude oil in naira for domestic refining remains in force,” Adedeji stated.
“The initiative was designed to ensure supply stability and optimize the utilization of local refining capacity.
There has been no decision at the policy level to discontinue this approach nor is it being considered.”
Adedeji emphasized that the initiative has consistently yielded positive results since its implementation.
Notably, it aligns with broader economic objectives, including reducing foreign exchange exposure and stabilizing the domestic fuel supply.
Furthermore, he stated that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.
Additionally, the chairman outlined the core objectives of the naira-for-crude framework.
These objectives include promoting competitive and efficient pricing, enhancing local refining capabilities, and ensuring a structured approach to crude oil supply.
This structured approach balances availability, demand, and market conditions effectively.
This assurance follows recent reports suggesting that the Nigerian National Petroleum Company (NNPC) Limited had suspended the naira-for-crude deal until 2030.
The reports cited the forward sale of its crude oil as the reason.
NNPC clarified that negotiations are actively ongoing for a new agreement with Dangote Petroleum Refinery.
The current six-month arrangement commenced on October 1, 2024, and will expire at the end of March.
In a statement issued on Monday, Zacch Adedeji, chairman of the naira-for-crude policy technical sub-committee, confirmed that the framework enabling crude oil sales in naira for domestic refining remains operational.
He dismissed any speculation regarding discontinuation, emphasizing that local refineries continue to access domestic crude supply under the policy.
“The engagement process for crude oil supply to domestic refineries remains in place through structured agreements,” Adedeji explained.
“There is no exclusion of local refineries from access to domestic crude.”
The federal government’s reassurance comes amid efforts to bolster Nigeria’s refining capacity and reduce reliance on imported petroleum products.
As negotiations for a renewed agreement progress, stakeholders are increasingly optimistic about the naira-for-crude initiative’s potential.
This initiative plays a crucial role in driving sustainable growth within the country’s energy sector.