Federal Government Reaffirms Commitment to Naira-for-Crude Policy

The Federal Government of Nigeria has reiterated its unwavering commitment to the Naira-for-Crude policy, emphasizing that there will be no reversal of the initiative. This policy mandates that transactions involving crude oil and refined petroleum products for domestic consumption be conducted in the Nigerian Naira, rather than foreign currencies.

Objective of the Policy

The primary aim of the Naira-for-Crude policy is to reduce Nigeria’s dependency on foreign exchange for energy-related transactions. By denominating these transactions in Naira, the government seeks to stabilize the local currency, enhance energy security, and promote investment in domestic refining infrastructure.

Implementation and Oversight

The policy is being implemented through the Technical Sub-Committee on Crude and Refined Product Sales in Naira, chaired by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun. The committee comprises key stakeholders from various sectors, including the Federal Inland Revenue Service (FIRS), Nigerian National Petroleum Company Limited (NNPCL), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

Stakeholder Engagement

Recent meetings held in Abuja have seen active participation from industry stakeholders, including representatives from local refining companies and regulatory agencies. These engagements have focused on reviewing the progress of the policy’s implementation and addressing any challenges encountered.

Economic Implications

By conducting crude oil and refined product transactions in Naira, the policy is expected to alleviate pressure on Nigeria’s foreign exchange reserves, encourage local refining, and contribute to the overall stability of the national economy. It aligns with broader economic reform efforts aimed at reducing inflationary pressures, boosting domestic production, and improving the country’s trade balance. The Federal Government’s steadfast commitment to the Naira-for-Crude policy underscores its strategic importance in Nigeria’s economic reform agenda. By fostering a more self-reliant energy sector and promoting the use of the local currency in critical transactions, the policy aims to strengthen the nation’s economic sovereignty and resilience.

Written By Fortune Davidson