Fuel prices in Nigeria are expected to drop soon following the decision of the Federal Government to continue its naira-for-crude agreement. This initiative, aimed at stabilizing the nation’s economy, is expected to bring much-needed relief to Nigerians at the fuel pumps.
Industry experts have noted that one of the largest players in the sector, Dangote Refinery, is expected to reduce its petrol loading costs by the end of this week, further supporting the anticipated drop in fuel prices.
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), reassured Nigerians that a price reduction is imminent. He discussed the Federal Executive Council’s (FEC) directive regarding the continued implementation of the naira-for-crude deal, which was officially announced earlier this week. Although the exact price drop has not been specified, Ukadike stated that the overall direction will undoubtedly ease the burden on consumers.
In the same vein, Eche Idoko, National Publicity Secretary of the Crude Oil Refinery-owners Association of Nigeria (CORAN), underscored the importance of expanding the program’s reach. Idoko emphasized that broader participation from local refiners could enhance the initiative’s benefits for the economy and strengthen the impact of the deal.
The naira-for-crude initiative was initially implemented last year in an attempt to curb Nigeria’s reliance on the U.S. dollar for petroleum transactions. As part of the plan, the government began selling crude oil to Dangote Refinery in naira instead of U.S. dollars. This move is part of a broader strategy to enhance local refining capacity and stabilize Nigeria’s foreign exchange market.
While the policy faced challenges in recent months, particularly when Dangote Refinery temporarily halted naira-denominated sales in March, the recent meeting held by the FEC reaffirms its commitment to making this a long-term strategy. The government stated that the initiative will remain in place, with plans to expand its scope.
Industry players, including Ukadike, have consistently supported the move, asserting that it will contribute significantly to lowering fuel prices in Nigeria. Additionally, the IPMAN official pointed out that marketers have long been advocating for the program’s success, as it would alleviate the financial strain on petroleum retailers caused by price fluctuations in the global market.
The resumption of this policy comes at a critical time for Nigeria, as the country faces economic challenges stemming from global economic instability and inflation. A key aspect of the plan is reducing the country’s dependence on foreign currency for petroleum transactions, which, in turn, should lead to greater price stability.
Ukadike highlighted that with the current drop in crude oil prices, marketers are hopeful that Dangote Refinery will soon announce a new, lower price for petrol. He expects this price reduction to be in place before the end of the week, which would have an immediate effect on pump prices nationwide.
While the renewal of the naira-for-crude agreement is being welcomed by stakeholders in the industry, there are still calls for a more inclusive approach to ensure that other local refineries benefit from the program. Idoko and other industry leaders have urged the government to ensure that all refineries are included in the deal, not just Dangote Refinery. The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) echoed these concerns, calling for broader participation to help stabilize fuel prices across the nation.
PETROAN’s National President, Billy Gillis-Harry, expressed support for the policy, stating that it is a crucial element in Nigeria’s efforts to stabilize the economy. He also called for the government to address issues of hunger and poverty, which remain pressing concerns in the country.
