In a historic move, Nigeria has started selling crude oil in Naira to reduce reliance on foreign currencies and bolster the local economy. Find out how this shift may affect the oil industry and Nigeria’s economy.
The Federal Government of Nigeria has announced that the country has officially begun selling crude oil and refined petroleum products in naira.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, announced on Saturday that following a directive from the Federal Executive Council (FEC), products began being sold in naira starting October 1.
This was revealed in a statement by Mohammed Manga, the Director of Information and Public Relations at the Ministry of Finance.
In a meeting led by the Honourable Minister of Finance and Coordinating Minister of the Economy, dedicated to conducting a post-commencement review of the initiative for Crude Oil and Refined Products Sales in Naira, key stakeholders confirmed their support for this strategic endeavor,” according to the statement.
The meeting convened notable individuals such as the Honourable Minister of State for Petroleum (Oil), the President’s Special Adviser on Revenue, the Energy Special Adviser to the President, and leaders from key industry organizations. Attendees included the Chief Executive of NMDPRA, a representative of Dangote Group’s Chairman along with their Vice President, and top executives from Nigerian National Petroleum Company (NNPC) including its Group CEO, CFO, and Executive VP overseeing Downstream operations.
READ ALSO: Crude Oil Theft: Reps Committee Pledges to Bring Culprits to Book
Manga observed that the strategic initiative and bold action taken by President Bola Tinubu’s administration is anticipated to have a long-lasting effect on Nigeria’s economy, fostering growth, stability, and self-sufficiency.
He mentioned that the nation is still managing the intricacies of global markets, and this strategic decision sets Nigeria up for future success.
This decision follows approximately nine weeks after the FEC sanctioned a plan put forth by Tinubu, instructing the NNPC to sell crude oil in naira to Dangote Petroleum Refinery and other refineries.
The Federal Government announced that the sale of crude oil to the Dangote refinery and other refineries in naira would begin on October 1.
The policy seeks to stabilize gasoline prices, which could lead to reduced and more predictable fuel expenses for consumers.
By conducting transactions in Naira instead of dollars, the strain on foreign exchange reserves would lessen, resulting in a more stable dollar-Naira exchange rate and helping to control inflation.
It would also boost local refining capacity, thereby reducing reliance on imported fuel and saving billions of dollars that could be reinvested in other areas of the economy.
The government’s action would enhance domestic refining capabilities, bolstering Nigeria’s energy security by ensuring a more dependable and self-sufficient fuel supply.
