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Naira-for-Crude Policy Expires, HURIWA Seeks Continuation
Naira-for-Crude Policy Expires, HURIWA Seeks Continuation
•Group says stoppage will throw more Nigerians into poverty
•Negotiation between FG, Dangote refinery continues without agreement
Chuks Okocha and Emmanuel Addeh in Abuja
The naira-for-crude for crude policy agreed between the Dangote refinery and the federal government for six months in the first instance, expired yesterday, without the parties finding a middle ground in their prolonged negotiations.
The deal expired as the Human Rights Writers Association of Nigeria (HURIWA) appealed to President Bola Tinubu to ensure a continuation of the initiative between the Nigerian National Petroleum Company Limited (NNPC) and indigenous refineries.
THISDAY recalls that the Naira-for-Crude policy is an initiative by the Nigerian government aimed at bolstering the domestic refining sector and reducing reliance on foreign exchange for crude oil transactions.
Launched in October 2024, the policy enables local refineries, notably the Dangote Petroleum refinery, to purchase crude oil in Nigerian naira rather than US dollars. The primary objectives are to alleviate pressure on the naira, minimise transaction costs, and enhance the availability of petroleum products within Nigeria.
Under the arrangement, the NNPC supplies crude oil to domestic refineries, which in turn provide refined petroleum products for the local market, all transactions conducted in naira. The strategy aims to stabilise fuel prices and support the local currency by reducing the demand for foreign exchange in the oil sector.
However, the policy has encountered challenges. The Dangote refinery had recently temporarily suspended fuel sales in naira due to discrepancies between naira sales and dollar-denominated crude purchases. The suspension raised concerns about potential increases in petrol prices and added pressure on the naira, as market participants might seek US dollars for transactions.
But despite these hurdles, discussions between NNPC and the Dangote refinery are ongoing to potentially renew and extend the naira-based crude supply agreement, with the aim of addressing supply issues and ensuring the policy’s sustainability.
As the parties have failed to reach an agreement, it has raised anxiety in the downstream oil and gas sector. The uncertainty has also led to the raising of petrol from about N860/litre to over N930/litre within one week.
But HURIWA, in the statement, stressed that any change in the arrangement could result in sudden and indiscriminate hikes in the pump prices of petroleum products, transportation, goods and services and inflation.
A statement by Emmanuel Onwubiko, National Coordinator of HURIWA, appealed to Tinubu to direct his Coordinating Minister for the Economy and Finance, Wale Edun, to transparently and rapidly reach agreement to continue the naira-to-crude-deal with local crude oil refineries.
HURIWA stated: “We make this public supplication and appeal because any alteration to this deal would mean excruciating hardships and the massive affliction of poverty on millions of the already suffering, struggling and multidimensionally poor households.
“Political leadership is not about theatrics or empty rhetorics but leadership ought to be embedded in the virtues of compassion, care for humanity and implementation of economic policies with human face.
“It is only when the interests of the greatest percentage of the citizens are satisfied that a central or regional government can be assessed to have kept faith with the constitutionally guaranteed principles of transparency, accountability and promotion of the public good. The security and welfare of the citizenry is the primary lawful duty of the government.”
HURIWA stated that based on its assessment of the public perception of the failure to keep the implementation of the naira-to-crude deal, many Nigerians would be thrown out of work, given that the operational costs of running small and medium scale businesses that depend of privately generated electricity power supply which come basically from petrol-powered generators, would shut down businesses and eventually sack of thousands of private sector workers.
It also said even citizens working with federal agencies and state governments would be in severe difficulties to meet up with the anticipated hikes in transportation and costs of living as a result of upward adjustments in the prices of petroleum products and the persistent poor salaries that the public sector workers earned.
HURIWA noted that there was a general climate of public anxiety not only in the downstream of the oil and gas sector as operators await the decision of the federal government on the naira-for-crude deal between the NNPC and the Dangote Petroleum refinery.
The rights group argued that the most affected segment of the society were the over 133 million multi-dimensionally poor households going by the old 2018 statistical data released by the National Bureau of Statistics (NBS).
HURIWA noted that the six-month naira-to-crude-deal, which started in October 2024, officially ended yesterday, adding that the extension of the deal or complete halt is still being discussed by the parties involved.
“However, it was gathered on Sunday that the committee responsible for the negotiations has yet to resolve the matter. As this lingers, the effect is now felt in the pump prices of refined petroleum products,” it added.
HURIWA stated that petrol has increased from about N860/litre to over N930/litre within one week, saying that dealers blamed the hike on the failure of the federal government to extend the naira-for-crude deal between the NNPC and Dangote refinery.
“Our marketers also projected a further hike in petrol price. They said the cost may hit N1,000/litre in weeks if nothing is done about the naira-for-crude deal that earlier helped in checking the rise in petrol prices,” it said.
HURIWA therefore advocated humane and compassionate governance from Tinubu, emphasising that his administration’s draconian and toxic anti-poor economic policies have thrown millions of people into destitution, mass hunger, unemployment, and economic depression.
•Group says stoppage will throw more Nigerians into poverty •Negotiation between FG, Dangote refinery continues without agreement Chuks Okocha and Emmanuel Addeh in Abuja The naira-for-crude for crude policy agreed
