Market News

The federal government has confirmed that the Naira-for-crude-oil swap deal remains in place, countering recent reports of its termination at the end of this month.

The clarification followed reports that the Nigerian National Petroleum Company Limited (NNPC) has ended the agreement with local refiners including the Dangote Refinery.

Chairman of the Technical Sub-Committee on Crude-for-Naira initiative, Zacch Adedeji, responding to the reports said there is no decision at the policy level to discontinue the initiative.

Adedeji said these reports do not reflect the realities of the ongoing work under the Federal Executive Council Initiative on Domestic Sales of Crude Oil and Refined Products in Naira.

“Our attention has been drawn to reports suggesting that the Naira-based crude oil supply arrangement with local refineries has been discontinued, forcing them to rely solely on international crude purchases.

“As the committee driving the implementation of this initiative, we wish to provide an update on the Federal Executive Council initiative and confirm as follows: The Naira-Based Domestic Sales Framework Remains in Place.

“The policy framework enabling the sale of crude oil in naira for domestic refining remains in force. The initiative was designed to ensure supply stability and optimise the utilisation of local refining capacity.

“There has been no decision at the policy level to discontinue this approach nor is it being considered. After implementing the policy for some months, evidence abounds that it is the right way to go and it will continue to help the economy.

“The engagement process for crude oil supply to domestic refineries therefore remains in place by structured agreements, balancing factors such as availability, demand, and market conditions.

“There is no exclusion of local refineries from access to domestic crude. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.”

Adedeji, who is also the chair of the Federal Inland Revenue Service (FIRS), said that the framework for domestic crude transactions is designed to promote a competitive and efficient pricing environment. “We remain committed to ensuring the efficient execution of this initiative in line with its core objectives – enhancing local refining, reducing foreign exchange exposure, and stabilising the domestic fuel supply,” he said.