FG Confirms Continuation of Naira-for-Crude Deal
The Federal Government of Nigeria (FG) has announced that the controversial Naira-for-Crude Oil deal will continue, reaffirming its commitment to the policy despite growing concerns and mixed reactions from stakeholders. The announcement comes amid ongoing debates about the effectiveness of the initiative in stabilizing Nigeria’s economy and addressing challenges in the oil sector.
The Naira-for-Crude Oil deal, introduced as part of efforts to boost local refining capacity and reduce reliance on imported petroleum products, allows domestic crude oil to be allocated to local refineries in exchange for payments made in Nigerian Naira instead of U.S. dollars. The policy aims to promote local refining, conserve foreign exchange reserves, and ensure a steady supply of refined petroleum products within the country.
Under the program, indigenous refineries are expected to process locally sourced crude oil and sell refined products back to the Nigerian market at competitive prices. However, the initiative has sparked intense debate, with critics questioning its transparency, feasibility, and long-term economic impact.
In a statement issued by the Minister of State for Petroleum Resources, the Federal Government reiterated its support for the Naira-for-Crude deal, describing it as a “necessary step towards achieving energy security and economic self-reliance.” The minister emphasized that the policy aligns with President Bola Tinubu’s administration’s agenda to revamp the oil and gas sector while addressing the perennial fuel scarcity issues that have plagued the nation.
“The Naira-for-Crude deal is designed to empower local refineries, create jobs, and reduce our dependence on foreign exchange for fuel imports,” the minister said. “We are confident that this policy will yield positive results if implemented properly.”
The minister also dismissed allegations of mismanagement and corruption surrounding the program, stating that mechanisms have been put in place to ensure accountability and transparency. He urged Nigerians to give the policy a chance, noting that similar initiatives have succeeded in other oil-producing nations.
While the government remains optimistic about the policy, reactions from stakeholders have been mixed. Some industry experts and economists have praised the initiative, arguing that it could help revive Nigeria’s comatose refining sector and reduce the billions of dollars spent annually on fuel imports.
“This policy has the potential to transform the downstream sector if managed effectively,” said Dr. Adeola Adeniyi, an energy economist. “However, success depends on strict oversight and ensuring that the refineries meet international standards.”
On the other hand, critics have raised concerns about the capacity of local refineries to handle the volume of crude oil allocated under the deal. Many of Nigeria’s refineries have been underperforming for years due to poor maintenance, outdated technology, and alleged mismanagement. Skeptics fear that continuing the program without addressing these underlying issues could lead to further inefficiencies and financial losses.
“It’s difficult to see how this policy will work when most of our refineries are operating below capacity or not functioning at all,” said Chinedu Okoro, a policy analyst. “Unless there’s a clear roadmap for upgrading infrastructure and enforcing compliance, we risk repeating past mistakes.”
The continuation of the Naira-for-Crude deal comes at a critical time for Nigeria’s economy, which has been grappling with inflation, currency devaluation, and declining oil revenues. Proponents of the policy argue that it could help stabilize the Naira by reducing demand for foreign exchange. At the same time, opponents warn that it may exacerbate existing challenges if not properly executed.
Labor unions and civil society groups have also weighed in, calling for greater transparency and public participation in decision-making processes related to the program. “Nigerians deserve to know how their resources are being managed,” said Aisha Mohammed, a spokesperson for a coalition of advocacy groups. “This policy must not become another avenue for corruption or elite enrichment.”
As the Federal Government presses ahead with the Naira-for-Crude deal, all eyes will be on its implementation and outcomes. The success or failure of the program will depend largely on the government’s ability to address lingering concerns about accountability, refinery performance, and overall economic impact.
For now, the debate over the policy continues to divide opinions, with some viewing it as a bold step towards economic transformation and others seeing it as a risky gamble. One thing is certain: the stakes are high, and the consequences of this decision will shape Nigeria’s energy landscape for years to come.
