Nigerian Government Begins Naira-Based Crude Oil Sales to Dangote Refinery and Others

As part of a new economic directive from President Tinubu, the Nigerian government begins crude oil sales in naira to local refineries, signaling a shift in the country’s oil trade policies

In a significant policy shift, the Nigerian government has officially commenced naira-based crude oil sales to local refineries, including Dangote Refinery, following a directive from President Bola Tinubu. This initiative aligns with the Federal Executive Council’s (FEC) mandate to conduct oil sales in the local currency, the naira.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed the launch of naira-based crude oil sales on October 1st, 2024, via an official statement shared on the ministry’s X (formerly Twitter) handle. According to the statement, “The sale of crude oil and refined petroleum products in naira has officially begun, marking a strategic move towards economic autonomy.”

The decision to implement naira-based crude oil sales was ratified during an October 3rd, 2024, meeting of the Implementation Committee, which conducted a review of the sales initiative. The meeting was attended by key stakeholders, including the Minister of State for Petroleum, special advisors to the president, representatives from the Dangote Group, and leadership from the Nigerian National Petroleum Company (NNPC).

This transition to naira-based crude oil sales had been in planning stages since July when President Tinubu first approved the initiative, with Dangote Refinery chosen as the pilot refinery for the program. While there were uncertainties surrounding its rollout, the government confirmed the launch as a step toward reducing reliance on foreign currencies in oil transactions.

Industry analysts are closely watching how the move will impact petroleum pricing, with many expecting it to influence market dynamics, though the full effect remains unclear.

This policy marks a pivotal moment for Nigeria’s oil industry, potentially reshaping its economic landscape as it embraces naira-based crude oil sales for key local refineries.