As directed by the Federal Executive Council, the sale of crude oil and refined products in Naira has officially begun in Nigeria.
A statement from the Ministry of Finance on Saturday said the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the initiative marks a bold step towards economic sustainability and currency stability,” Edun stated.
Edun, announced implementation of the initiative approved by the Federal Executive Council (FEC) started on October 1, 2024.
Speaking after a post-commencement review meeting, Edun disclosed key stakeholders assured of the commencement of the strategic initiative.
The review meeting was held to assess the progress of the “Crude oil and refined products sales in Naira” initiative and the consensus reached highlighted the government’s commitment to seeing the plan through.
“The sale of crude oil and refined products in Naira has officially begun as directed by the Federal Executive Council. This initiative marks a bold step towards economic sustainability and currency stability,” Edun stated.
Last month, the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency revealed that President Bola Ahmed Tinubu had given the green light for crude oil to be sold to local refineries in Naira.
This decision, according to the committee, will also apply to the purchase of petroleum products.
According to the committee, from October 1, 2024, the Nigerian National Petroleum Company (NNPC) commenced the supply of approximately 385,000 barrels per day (bpd) of crude oil to the Dangote Refinery, with payments made in Naira. This partnership is expected to reshape Nigeria’s oil and gas landscape, as the Dangote Refinery, located in Lekki, Lagos, is Africa’s largest oil refining facility, valued at over $20 billion.
The government had previously outlined that this initiative would reduce pressure on the Naira, eliminate unnecessary transaction costs, and ensure a steady supply of petroleum products across the country. This innovative approach is expected to improve the country’s macroeconomic indicators, including foreign exchange reserves.
Chairman of the technical committee and FIRS boss, Zacch Adedeji, explained that under the initiative, crude oil would be sold to the Dangote Refinery in exchange for refined petroleum products such as Premium Motor Spirit (PMS) and diesel.
These products would then be supplied to the domestic market for distribution, with payments also made in Naira.
“Diesel will be sold in Naira by the Dangote Refinery to any interested off-taker while PMS will only be sold to NNPC, which will then distribute it to various marketers,” Adedeji explained.