Naira-for-Crude Negotiations for Renewal Underway: What’s at Stake for Nigeria’s Economy

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The Technical Sub-Committee on the Naira-for-Crude Policy convened on Thursday at the Ministry of Finance Headquarters in Abuja to evaluate developments and reaffirm commitments to the policy framework. A senior government official revealed that the meeting was attended by key stakeholders, including the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who joined virtually.

The Executive Chairman of the Federal Inland Revenue Service, Dr Zacch Adedeji, emphasised the importance of the policy, stating, “The Naira-based crude sales framework remains intact. There are no plans to discontinue this important economic initiative.” He added that the policy promotes competitive pricing and efficiency in the domestic crude market.

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The NNPC presented a crude delivery report detailing the volume of crude oil allocated for domestic refining under the policy. The NMDPRA provided a domestic production report covering the Dangote Petroleum Refinery and Petrochemicals, NNPC Warri Refinery, and Port Harcourt Refinery.

The NNPCL initiated fresh negotiations with the Dangote Petroleum Refinery over the renewal of the naira-for-crude agreement, which is set to expire on March 31, 2025. The NNPCL Chief Corporate Communications Officer, Olufemi Soneye, explained that the initial deal was for six months and that the 650,000-capacity refinery has received 48 million barrels to refine for petroleum products.

According to Soneye, “To clarify, the contract for the sale of crude oil in Naira was structured as a six-month agreement, subject to availability, and expires at the end of March 2025.” He added that discussions for a new contract are already underway.

The naira-for-crude policy, which commenced on October 1, 2024, aims to improve supply, save the country millions of dollars in petroleum product imports, and ultimately reduce the pump prices of refined products. As of December 2024, crude oil worth about N486.31 billion was received by the $20 billion Lekki-based refinery under the deal

The Chairman of the Technical Sub-Committee on the naira-for-crude deal, Zacch Adedeji, reaffirmed the government’s stance, emphasising that the termination of the contract was never a consideration. He said, “There is substantial evidence supporting the policy as the correct approach, and it will continue to contribute positively to the nation’s economy.”

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Adedeji’s statement was in response to claims that the government-owned oil company had suspended the naira-for-crude deal until 2030 as it had forward-sold all its crude oil. However, the NNPCL denied these claims, stating that discussions for a new contract are already underway.

The naira-for-crude policy has been seen as a positive step towards improving the country’s economy, as it aims to reduce the country’s reliance on imported petroleum products. The policy has also been praised for its potential to create jobs and stimulate economic growth.

As the negotiations for the renewal of the naira-for-crude agreement continue, stakeholders are eagerly awaiting the outcome. The success of the policy will depend on the ability of the government and the NNPCL to negotiate a favourable deal that benefits the country and its citizens.

In conclusion, the Technical Sub-Committee on the Naira-for-Crude Policy meeting marked an important step towards the renewal of the naira-for-crude agreement. The policy has the potential to positively impact the country’s economy, and stakeholders are hopeful that the negotiations will yield a favourable outcome.

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