The suspension of the naira-for-crude swap deal by the Nigerian National Petroleum Company Limited (NNPCL) has sparked concern among industry stakeholders, prompting calls for President Bola Ahmed Tinubu to intervene. The Conference of Progressive Nigerians (CPN), an advocacy group, is leading the demand for urgent action, warning that the decision could harm Nigeria’s economy and weaken local refineries.
Background of the Naira-for-Crude Deal
The naira-for-crude swap deal, introduced on October 1, 2024, was designed to reduce Nigeria’s reliance on the US dollar for crude oil transactions. Under the policy, NNPCL supplied crude oil to domestic refineries, including the Dangote Refinery, with payments made in naira instead of dollars. The initiative aimed to ease pressure on Nigeria’s foreign exchange reserves, stabilise the naira, and support local refinery operations.
President Tinubu championed the policy, highlighting its success in cutting transaction costs and strengthening the domestic market. By late 2024, it had contributed to a drop in petroleum product prices, earning praise from industry leaders, including Aliko Dangote, President of Dangote Industries Limited. However, the NNPCL’s abrupt suspension of the deal earlier this week has raised questions about the reasons behind the decision and its impact on Nigeria’s economy.
CPN Raises Alarm
During a press briefing in Abuja on March 12, 2025, CPN Convener Dr. Emmanuel Agabi called on Tinubu to reverse the suspension, warning that it could derail the administration’s economic goals. “This decision threatens local refinery growth and adds more pressure on the naira,” he said.
Agabi also questioned who stood to benefit from the deal’s suspension, citing NNPCL’s claim that contractual obligations required the halt. “We demand transparency and immediate reinstatement of the naira-for-crude deal,” he insisted. The CPN cautioned that if the deal is not restored, Nigeria could face worsening foreign exchange shortages and further depreciation of the naira, which already lost 40.9% of its value in 2024.
Economic Impact of the Suspension
With the suspension in place, domestic refineries like Dangote’s must now source crude oil from international suppliers and pay in dollars. Economists warn this could worsen Nigeria’s foreign exchange crisis, as the naira remains fragile. In 2024, the currency plummeted from N907.11 to N1,535 per dollar, despite efforts by the Central Bank of Nigeria to stabilise it.
Ending the naira-for-crude deal removes a key policy that helped conserve foreign reserves and keep fuel prices stable. Experts fear that increased dollar demand for crude imports could drive up petroleum costs, reversing recent price reductions.
The timing of the decision has also raised concerns. Earlier reports indicated that the NNPCL and Dangote Refinery were in talks to extend the deal. The sudden reversal has led to speculation over internal disputes or external pressure influencing the suspension.
Calls for Tinubu’s Action
CPN’s call for Tinubu to intervene reflects broader concerns about Nigeria’s economic direction. Since taking office in May 2023, the President has positioned himself as a reformer, introducing policies like the naira-for-crude deal to reduce dollar dependency and boost local industries. However, the suspension threatens to shake investor confidence and undermine his economic strategy.
“The President must act now,” Agabi urged. “This isn’t just about refineries—it’s about the economy, the naira, and the welfare of Nigerians.” CPN has also called for an investigation into the decision, demanding transparency to determine if vested interests played a role.
A Tough Decision for Tinubu
Tinubu faces a difficult choice. Reinstating the deal could reinforce his commitment to economic reform and support local refineries. However, if the NNPCL halted the policy due to contractual or fiscal pressures, reversing it may not be straightforward. His response will shape public confidence in his administration’s handling of economic policies.
As of today, March 13, 2025, the Presidency has yet to comment on CPN’s appeal. Meanwhile, Nigerians on social media platform X have expressed frustration, with some accusing the government of policy inconsistency.
The suspension of the naira-for-crude swap deal has sparked heated debate, placing President Tinubu under pressure to act. With economic concerns mounting, stakeholders are watching closely to see if he will intervene or allow the suspension to stand. His decision in the coming days will have lasting implications for Nigeria’s economy and financial stability.
