Naira-for-Crude Deal to Commence on Tuesday as Nigerians Await Reduced Fuel Prices

Nigeria will witness a major shift in its crude oil policy with the commencement of the Naira-for-crude deal on October 1, 2024. This initiative, confirmed by the Nigerian government, aims to supply crude oil in Naira by the Nigerian National Petroleum Company Limited (NNPC) to the Dangote Refinery. The primary goal is to reduce the cost of Premium Motor Spirit (petrol) for Nigerians.

Dare Adekanmbi, spokesperson for Zacch Adedeji, Chairman of the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency, stated, "I can confirm to you that the Chairman, Sub-Technical Committee, Zacch Adedeji, is working day and night to ensure that things go according to plans. He knows how important it is to have the agreement implemented as has been planned for the benefit of Nigerians."

The Federal Executive Council, led by President Bola Tinubu, approved this sale on September 13, 2024. From October 1, NNPC will commence the supply of approximately 385,000 barrels per day (kbpd) of crude oil to the Dangote refinery, which translates to about 11.5 million barrels monthly. In return, the refinery will release equivalent volumes of refined diesel and petrol to the domestic market, also in Naira.

This development is expected to bring down the price of petrol, which currently ranges between N950 and N1,100 per litre nationwide. The Publicity Secretary of the Crude Oil Refinery-owners Association of Nigeria, Eche Idoko, emphasized the need to extend this deal to other modular refineries in the country, not just the Dangote Refinery.

Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, noted that selling crude oil to local refineries in Naira would massively reduce petrol prices. However, the exact pricing from the Dangote Refinery remains undisclosed, with Aliko Dangote, President of Dangote Group, claiming his petrol is cheaper than imported ones but withholding specific figures.

The Technical Sub-Committee, chaired by Zacch Adedeji, includes representatives from various governmental bodies such as the Federal Ministry of Finance, Central Bank of Nigeria, AfreximBank, and the Nigerian Upstream Petroleum Regulatory Commission.

This committee has worked intensely to ensure the successful implementation of the initiative, which aims to reduce pressure on the Naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across Nigeria.