Amid swirling rumors, the Technical Sub-Committee on the Federal Government’s Naira-for-Crude policy has clarified that the initiative remains firmly in place. Contrary to reports suggesting the discontinuation of the Naira-based crude oil supply arrangement with local refineries, the committee has reaffirmed its commitment to the policy, emphasizing its role in stabilizing the economy and supporting domestic refining. Here’s what you need to know.
The Policy: A Commitment to Local Refining
The Naira-for-Crude policy, introduced under the Federal Executive Council Initiative on Domestic Sales of Crude Oil and Refined Products, aims to ensure a stable supply of crude oil to local refineries while reducing reliance on foreign exchange. The policy allows domestic refineries to purchase crude oil in Naira, promoting self-sufficiency and economic stability.
In a statement signed by the committee’s chairman, Zacch Adedeji, the group dismissed recent reports claiming the policy had been scrapped. “These reports do not reflect the realities of the ongoing work under the Federal Executive Council Initiative,” the statement read.
Key Points from the Committee’s Statement
The Naira-Based Framework Remains in Place
The committee confirmed that the policy framework enabling the sale of crude oil in Naira for domestic refining is still active. “There has been no decision at the policy level to discontinue this approach, nor is it being considered,” the statement emphasized. The initiative has been praised for its positive impact on the economy, and the committee sees no reason to halt it.
Local Refineries Continue to Access Domestic Crude
Contrary to rumors, local refineries have not been excluded from accessing domestic crude oil. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act. Structured agreements are in place to balance factors like availability, demand, and market conditions.
Promoting Competitive Pricing and Market Efficiency
The policy is designed to create a competitive and efficient pricing environment for domestic crude transactions. By reducing foreign exchange exposure and enhancing local refining capacity, the initiative aims to stabilize the domestic fuel supply and support economic growth.
Strengthening Implementation
The committee remains committed to improving the execution of the policy. “We remain committed to ensuring the efficient execution of this initiative in line with its core objectives—enhancing local refining, reducing foreign exchange exposure, and stabilizing the domestic fuel supply,” the statement concluded.
Why This Matters: A Boost for Nigeria’s Economy
The Naira-for-Crude policy is more than just a regulatory measure—it’s a strategic move to strengthen Nigeria’s economy. By prioritizing domestic refining, the policy reduces the country’s dependence on imported refined products, conserves foreign exchange, and creates jobs in the local oil and gas sector.
The committee’s reassurance comes at a critical time, as Nigeria continues to grapple with economic challenges. The policy’s success could pave the way for greater self-reliance and economic resilience.
Key Takeaways
The Naira-for-Crude policy remains in place, despite rumors of its discontinuation.
Local refineries continue to access domestic crude oil through structured agreements.
The policy promotes competitive pricing, market efficiency, and economic stability.
The committee is committed to strengthening the initiative’s implementation.
The policy supports local refining, reduces foreign exchange exposure, and stabilizes fuel supply.