Nigerians react to ‘suspension’ of naira-for-crude deal
Mixed reactions have trailed reports that the Nigerian National Petroleum Company Limited (NNPCL) has suspended the naira-for-crude oil swap deal with domestic refiners, including Dangote Refinery and other private operators. The naira-for-crude arrangement, introduced on October 1 2024, allowed local refiners to purchase crude oil in naira instead of dollars. The initiative was designed to […]
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Mixed reactions have trailed reports that the Nigerian National Petroleum Company Limited (NNPCL) has suspended the naira-for-crude oil swap deal with domestic refiners, including Dangote Refinery and other private operators.
The naira-for-crude arrangement, introduced on October 1 2024, allowed local refiners to purchase crude oil in naira instead of dollars. The initiative was designed to support domestic refining capacity, reduce reliance on imported petroleum products, and stabilize the local currency by easing pressure on foreign exchange reserves.
The termination of the agreement means that Nigerian refineries, including the much-anticipated Dangote facility, will now have to source crude oil from international suppliers, paying in dollars instead of naira. This shift is expected to escalate operational costs, potentially leading to higher fuel prices at the pump.
BusinessDay quoted sources familiar with the development as saying the NNPC informed local refiners that it has already committed its crude oil production to forward contracts, leaving no supply available for domestic refineries.
Although the oil firm is yet to officially react to the issue, Nigerians have been sharing their thoughts on social media.
Writing via @IEnakhna, Pro Imonokha Enakhena, said: “If Nigeria stops accepting naira for crude, buyers will need to source foreign currency (mainly U.S. dollars), increasing demand for dollars. This could further devalue the naira, making imports more expensive and worsening inflation.”
@agu_i: “Blindness policies, all these were agreed because of dangote, if we have enough crude that will serve the country why you scared of Naira for crude swap, abi I’m I forgetting something here.”
@Nanaezze: “So which other options left now to exploit? Tell us since that did nothing to Naira stability against other currencies.”
@deee_odion: “What wants to happen now is dollar will be used to demand for oil no more Naira. In one hand you are spending billions from Nigeria’s reserves to shore up the Naira on the other hand you are destroying the Naira, encouraging demand for oil with dollars which is used as Nigerias budget benchmark. This is has to be the worst and clueless government ever!.”
@Faithysia_blunt: “When other country Insist you use their own currency. Wetin I find come this kind country ?”