Nigeria Officially Begins Crude Oil Sales in Naira

Nigeria has officially commenced the sale of crude oil and refined petroleum products in its local currency, the naira. This development marks a major shift in the country’s oil trading strategy and is part of the federal government’s broader economic policy aimed at boosting self-sufficiency and economic growth.

Wale Edun, Minister of Finance and Coordinating Minister of the Economy, announced the start of the naira-based oil sales in a statement released on Saturday, October 5, 2024. The new policy took effect on October 1, following directives from the Federal Executive Council (FEC).

Edun said the decision followed a meeting of the Implementation Committee tasked with reviewing the rollout of the initiative. Key stakeholders present at the meeting included the Minister of State for Petroleum, Special Advisers to the President on Revenue and Energy, leadership from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and senior executives from the Nigerian National Petroleum Company (NNPC) and the Dangote Group.

“This strategic initiative is a bold step taken by the administration of President Bola Tinubu, and it is expected to have a lasting impact on Nigeria’s economy by promoting growth, stability, and self-sufficiency,” Edun noted.

The move, which was approved by the FEC in July, directs the NNPC to sell crude oil to the Dangote Petroleum Refinery and other refineries in naira. This policy is seen as a key step toward reducing Nigeria’s reliance on foreign currency for oil transactions and insulating the economy from fluctuations in global oil markets.

On September 30, Eche Idoko, the Publicity Secretary of the Crude Oil Refinery-owners Association of Nigeria (CORAN), confirmed that the policy would initially apply to refineries producing petrol. Days later, the Nigerian Ports Authority (NPA) began coordinating efforts with other stakeholders to ensure a smooth implementation of the naira-based oil sales to the Dangote refinery.

The Tinubu administration views this transition as critical for ensuring long-term economic stability, fostering local industry growth, and reducing dependence on foreign exchange reserves.