THERE is widespread relief in Nigeria as the federal government said that the naira-for-crude deal with local refiners will continue.
Analysts, who spoke to this newspaper say the deal will likely reduce the local petrol price, particularly in the face of declining global oil prices triggered by the global trade war.
One oil analyst said the petrol price in the Nigerian market “will drop due to the naira-for-crude deal and the falling global oil prices,” noting that this would “provide a relief for consumers.”
Brent crude fell by 3.52 percent to $60.61 per barrel on Wednesday at 5.30pm, with WTI crude closing at $57.31, representing a drop of 2.21 percent from Tuesday.
The global oil prices are fast declining as United States President Donald Trump imposes a 104 percent tariff on Chinese goods and at least 10 percent duty on United States trading partners. Nigerian exporters now pay 14 percent tariff to ship products to the U.S. China has in turn imposed an 84 percent levy on U.S. goods.
However, the Technical Sub-Committee on the Crude and Refined Product Sales in Naira initiative convened a meeting on Tuesday to review progress and address ongoing implementation matters.
In a statement made available on X (formerly Twitter), the stakeholders at the meeting reaffirmed the government’s continued commitment to the full implementation of this strategic initiative, as directed by the Federal Executive Council (FEC).
It read: “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.
“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.”
On March 13, BusinessDay reported that Dangote Refinery, Africa’s largest oil refinery, was considering increasing its crude oil imports from Angola and Algeria as discussions continued over the naira-for-crude arrangement with the Nigerian government.
This was due to doubts over the naira-for-crude deal.
Bloomberg data show that Dangote Refinery has taken delivery of more than three million barrels of American crude since the start of the month.
The refinery has also purchased closer to home, importing a shipment of Angola’s Pazflor grade and a cargo of Algeria’s Saharan Blend from Glencore Plc in recent weeks.
According to analysts at Energy Aspects Ltd., crude deliveries to the Dangote refinery have averaged 450,000 barrels per day in the past two weeks, up from an estimated 380,000 barrels per day in January and February.