In a decisive policy shift, the Federal Executive Council (FEC) has approved the full-scale implementation of the Naira-for-Crude initiative, a move aimed at strengthening Nigeria’s energy autonomy and easing pressure on foreign exchange reserves.
The directive, confirmed by the Ministry of Finance via its official X (formerly Twitter) handle on Wednesday, reinstates the framework that allows local refineries to pay for crude oil in naira, a system previously halted at the end of March 2025 when the pilot phase expired.
The initial six-month arrangement between the Federal Government, Nigerian National Petroleum Company Limited (NNPC Ltd.), and the Dangote Petroleum Refinery concluded on March 31, without immediate renewal. In the interim, the Dangote refinery had reverted to dollar-based transactions, raising concerns over sustainability and affordability in Nigeria’s downstream sector.
Following a strategic review meeting on Tuesday, the government has made it clear: the Naira-for-Crude policy is no longer an experimental measure; it is a permanent fixture of Nigeria’s energy and economic strategy.
“This initiative is not a temporary or time-bound intervention,” the Ministry’s statement read, “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 Technical Sub-Committee overseeing the initiative reaffirmed its commitment to resolving outstanding implementation issues and aligning stakeholders on a long-term roadmap. The updated policy framework is expected to deliver multiple benefits, including:
- Reduced demand for U.S. dollars in the fuel import ecosystem
- Improved stability in the foreign exchange market
- Support for local refining and job creation
- A shift toward energy self-reliance
Analysts say the FEC’s decision marks a bold step in decoupling Nigeria’s energy economics from global currency volatility and foreign refining dependencies, a strategy seen as critical given the recent fiscal strain from falling oil prices and fluctuating FX reserves.
With Nigeria’s refining capacity set to increase and pressure mounting to reduce fuel subsidies, the Naira-for-Crude model could become a defining policy of the Tinubu administration if execution meets intent.
