In a move designed to strengthen Nigeria’s economy and boost the naira, President Bola Tinubu introduced a groundbreaking naira-for-petroleum deal aimed at reducing reliance on the U.S. dollar. However, powerful forces within the petroleum sector seem intent on sabotaging this initiative. Those working against it are not hard to spot—they are the same individuals who have historically prioritized foreign interests over national prosperity.
A well-known adage suggests that Nigeria’s political elite function more as caretakers of the nation’s wealth for international stakeholders rather than true representatives of the people. This sentiment appears to hold weight, given the immediate pushback against Tinubu’s directive. Almost instantly, certain economic players stepped forward to argue that petroleum, as a globally traded commodity, can only be bought and sold in U.S. dollars.
Contrary to what these detractors claim, there is no universal law dictating that crude oil must be traded exclusively in dollars. In fact, history shows that the U.S. government secured the petrodollar arrangement with Saudi Arabia by ensuring that the House of Saud would maintain its rule in exchange for denominating oil sales in dollars. If such a deal could be brokered then, why shouldn’t Nigeria have the autonomy to trade its petroleum in naira?
Under Tinubu’s policy, both domestic and foreign buyers would first purchase naira through the Central Bank of Nigeria (CBN) before using it to pay for Nigerian crude and refined petroleum. This approach would increase demand for the local currency, thereby bolstering its value against foreign currencies.
Resistance from Within: Who’s Blocking the Naira-for-Petroleum Deal?
Despite the economic benefits, resistance from within has slowed implementation. The Technical Sub-Committee tasked with rolling out the plan failed to establish a long-term framework within the initial six-month trial period. Their inaction suggests either incompetence or a deliberate effort to derail the initiative.
Initially, when Tinubu took office, he scrapped the fuel subsidy, causing the petrol pump price to skyrocket from N195 to N557 overnight. Prices later surged past N1,100 in some regions. However, with the naira-for-petroleum policy in place, Dangote Refinery—one of its primary beneficiaries—was able to reverse the trend. By late 2024, petrol prices dropped from N970 to N815 per liter, undercutting the cost of imported fuel.
This success was met with hostility from vested interests who feared that continued price reductions could drive costs down to as low as N500 per liter. If Dangote Refinery could profit while selling at a reduced price, it suggests that local production has always been viable, but previous inefficiencies or corruption within the Nigerian National Petroleum Company Limited (NNPCL) kept prices artificially high.
NNPCL’s Role in Undermining the Policy
NNPCL, despite being a stakeholder in Dangote Refinery with a 7.2% ownership share, has not acted in good faith. The company was expected to supply Dangote Refinery with 350,000 barrels of crude per day, as per the President’s directive. Instead, it only provided 120,000 barrels daily and eventually ceased supply altogether by February 2025. This deliberate obstruction has thrown the entire deal into jeopardy.
Many believe that those pulling the strings within NNPCL are simply biding their time, waiting for the policy to fail so they can justify reverting to dollar-based transactions. Meanwhile, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), which should have played a supervisory role, has remained passive, only now asking for suggestions on how to sustain the deal.
With NNPCL halting crude supply to Dangote Refinery, the refinery had little choice but to discontinue its naira-based sales. As a result, petrol prices shot up almost immediately, reaching N930 in Lagos and N970 in northern Nigeria. The Nigerian people, once hopeful for lower fuel costs, are now left bearing the burden of higher prices once again.
Industry groups like the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) have voiced their opposition to dollar-based transactions within Nigeria, urging the government to ensure that all domestic sales are conducted in naira. Meanwhile, legal provisions in the CBN Act (Sections 20(1) and 20(5)) explicitly state that only the naira should be recognized as legal tender for economic transactions in Nigeria—rules that are now being blatantly ignored.
Can the Policy Be Revived?
The responsibility now falls on President Tinubu and NNPCL Chairman Pius Akinyelure to bypass petroleum sector bureaucrats and leverage their private sector expertise to revive the naira-for-petroleum deal. Without decisive action, Nigeria risks falling back into the hands of economic saboteurs who prioritize foreign interests over national stability.
For now, the dream of a self-sustaining, naira-powered petroleum economy remains in limbo. But with strategic leadership and public pressure, there’s still hope that this bold economic move can be restored to benefit all Nigerians.