Oil marketers have said that Nigerians may soon experience significant relief as the pump price of Premium Motor Spirit is expected to drop sharply.
This follows the Federal Government’s continued implementation of the crude oil and refined product sales in naira initiative.
They also revealed that the Dangote Refinery, a key player in the downstream sector, is set to reduce its petrol loading costs by the end of the week — a move that is likely to further drive down prices.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, has reassured Nigerians of an imminent reduction in petrol prices, citing the Federal Executive Council’s directive on the naira-for-crude oil initiative announced on Wednesday.
However, Ukadike noted that the exact margin of the price drop remains uncertain, as the government is yet to disclose the official selling price for its petroleum products under the new arrangement.
Meanwhile, the National Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria, Eche Idoko, underscored the importance of including more local refiners in the naira-for-crude initiative. He emphasized that wider participation would boost the economic benefits and amplify the impact of the agreement.
This comes as the Federal Executive Council, after initial delays, ordered the full implementation of the previously suspended naira-for-crude agreement with local refineries during its meeting on Wednesday.
It said the initiative with local refineries is not a temporary measure but a “key policy directive designed to support sustainable local refining.”
The Ministry of Finance made this known in a statement posted on its official X handle, titled “Update on the Crude and Refined Product Sales in Naira Initiative.”
The statement followed a meeting held on Tuesday between the Minister of Finance, Wale Edun, and representatives of Dangote Refinery—one of the key beneficiaries of the agreement—to assess progress and resolve issues related to the ongoing implementation.
Also in attendance at the meeting were representatives from Dangote Petroleum Refinery and Petrochemicals, the Nigerian Upstream Petroleum Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Central Bank of Nigeria, Nigerian Ports Authority, Afreximbank, and the committee’s secretary, Hauwa Ibrahim.
As part of efforts to ease pressure on the U.S. dollar and ensure price stability in the petroleum sector, the Federal Executive Council had, in July 2024, directed the national oil company to supply crude oil to Dangote Refinery in naira instead of U.S. dollars for an initial six-month period.
The sale of crude oil and refined petroleum products in naira to local refineries commenced on October 1, 2024 to improve supply, save the country millions of dollars in petroleum products imports, and ultimately reduce pump prices.
However, in March, Dangote refinery said it had temporarily halted the sale of petroleum products in naira. The refinery said the decision to halt sales in naira was “necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars”.
Following the announcement, private depot owners swiftly increased the loading cost of petrol, resulting in a hike in the pump price from around N860 to about N960 per litre. This led to consumers paying at least N70 more per litre than they did just days earlier.
However, in a fresh update released on Wednesday, the committee clarified that the naira-for-crude policy is not a temporary measure but part of a long-term strategy aimed at reducing Nigeria’s reliance on foreign exchange for petroleum transactions.
The statement read, “The Technical Sub-Committee on the Crude and Refined Product Sales in Naira initiative convened an update meeting on Tuesday to review progress and address ongoing implementation matters.
“The stakeholders reaffirmed the government’s continued commitment to the full implementation of this strategic initiative, as directed by the Federal Executive Council.
“Thus, the Crude and Refined Product Sales in Naira initiative is not a temporary or time-bound intervention, but a key policy directive designed to support sustainable local refining, bolster energy security, and reduce reliance on foreign exchange in the domestic petroleum market.”
The policy, which mandates that crude oil and refined petroleum products be traded in naira, is designed to strengthen Nigeria’s economic sovereignty, boost local refining capacity, and stabilise the foreign exchange market by curbing the demand for dollars in domestic petroleum transactions.
According to the Ministry of Finance, the initiative is also structured to promote energy security and attract greater investment in the country’s refining infrastructure.
While acknowledging that the transition involves complexities, the government admitted that existing challenges are being systematically addressed.
“As with any major policy shift, the committee acknowledges that implementation challenges may arise from time to time.
“However, such issues are being actively addressed through coordinated efforts among all parties. The initiative remains in effect and will continue for as long as it aligns with the public interest and supports national economic objectives,” the statement concluded.
