Faith Nyasuguta
Nigeria’s oil industry is experiencing renewed hope as the federal government revives its naira-for-crude initiative– a policy move poised to benefit the Dangote Refinery and other local modular plants. After months of suspension, the reintroduction of this strategic program is expected to strengthen the country’s refining capacity, conserve foreign reserves, and stabilize fuel prices.
The Federal Ministry of Finance confirmed the return of the Crude and Refined Product Sales in Naira initiative following a high-level meeting of the Technical Sub-Committee. The scheme allows domestic refiners to purchase crude oil using naira instead of the U.S. dollar– a major shift aimed at reducing dependence on foreign exchange in the petroleum sector.
In an official statement, the Ministry emphasized that this is not a short-term fix. “The Crude and Refined Product Sales in Naira Initiative is not a temporary or time-bound intervention, 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 release noted.
The revival of the initiative signals the government’s renewed commitment to long-term structural reforms in the oil sector. The decision is widely seen as an attempt to provide lasting support for homegrown energy production while also mitigating the pressure on Nigeria’s foreign currency reserves.
Industry watchers say the return of the policy is especially significant for the Dangote Refinery, Africa’s largest refinery, which has faced major setbacks due to the initiative’s earlier suspension. The Nigerian National Petroleum Corporation (NNPC) had previously halted crude oil sales to Dangote Refinery in naira after their six-month agreement expired in March 2025. This forced Dangote to align with market practices that demand payment in U.S. dollars, an arrangement that strained operations and affected petrol pricing.
Without access to discounted crude under the naira-for-crude plan, Dangote and other local refineries were expected to raise fuel prices, leading to broader market consequences. The earlier suspension also sparked concerns over rising pump prices nationwide, reduced competitiveness in the refining sector, and increased reliance on imported petroleum products.
Now, with the policy reinstated, Dangote Refinery and its counterparts are expected to regain a crucial cost advantage. Analysts believe this will not only help stabilize fuel prices but also promote healthy competition within the local refining landscape. For consumers, the move could mean some relief at the pumps, while for investors and industry stakeholders, it suggests a more predictable and supportive environment for domestic refining.
The government, through this revived initiative, aims to address critical issues such as fuel supply disruptions, high operational costs, and the stunted growth of local refining capacity. By accepting naira for crude oil, refiners can better manage their financial obligations, leading to improved output and reduced reliance on fuel imports.
As Nigeria works to reposition itself as a refining hub in West Africa, the return of the naira-for-crude policy could be a game-changer, especially if consistently applied and well-regulated. With Dangote Refinery back in the loop, all eyes are on how the renewed policy will shape Nigeria’s energy future.
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