Nigeria Begins Sales Of Crude Oil And Refined Petroleum Products In Naira

Nigeria has officially started selling crude oil and refined petroleum products in naira currency, which will reduce the pressure on foreign exchange reserves, help stabilize the dollar-naira exchange rate and control inflation.

This move is also expected to increase local refining capacity, which will reduce dependence on imported fuel and save billions of dollars that can be reinvested in other parts of the economy.

The Minister of Finance announced over the weekend that, following a directive from the Federal Executive Council (FEC), the sale of these products in naira began on Oct. 1.

Director of Information and Public Relations at the Ministry of Finance Mohammed Manga shared this information via an official statement.

Following a meeting of the Implementation Committee led by the minister of finance, key stakeholders confirmed the start of crude oil and refined products sales in the naira initiative.

The meeting included important figures such as the Minister of State for Petroleum, the Special Adviser to the President on Revenue, the Special Adviser on Energy, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), representatives from the Dangote Group and the management of the Nigerian National Petroleum Company (NNPC).

The Director of Information and Public Relations said that this initiative -- introduced by the administration of President Bola Tinubu -- was expected to significantly impact Nigeria's economy by promoting growth, stability and self-sufficiency.

He added that as Nigeria navigated the challenges of global markets, this strategic move positioned the country for future success.

The decision comes about nine weeks after the FEC approved a proposal by the President, directing the NNPC to sell crude oil to Dangote Petroleum Refinery and other refineries in naira.

While the government announced that crude oil would be sold to Dangote in naira, in exchange, the Dangote refinery will supply petrol and diesel of equal value to the domestic market, with payments also made in naira.

"Diesel will be sold in naira by the Dangote refinery to any interested off-taker. PMS will only be sold to NNPC. NNPC will then sell to various marketers for now. All associated regulatory costs (NPA, NIMASA, etc.) will also be paid in naira," the finance ministry said, Punch reported.

"We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative."

Last month, the government raised $900 million through its first-ever domestic dollar bond sale, intending to diversify funding sources and avoid high results in international markets.