Oil and gas expert Ademola Adigun has called for an end to the ongoing crude-for-naira arrangement between the Federal Government and Dangote Refinery, describing the deal as opaque, unsustainable, and counterproductive to the government’s stated goal of subsidy removal.
Speaking on Inside Sources with Laolu Akande on Channels Television on Friday, Adigun expressed concern over the lack of transparency and clarity in the negotiations, pointing out that both parties — the government and the refinery — have not been entirely open with Nigerians.
“I think they’re negotiating and they weren’t able to come to an agreement for many reasons,” he said. “I think both parties have been less than upfront with what has been done. Government can only meet its obligations if it has enough crude to everybody. A lot of the crude from Nigeria has been impaired by loans they’ve taken.”
According to Adigun, the current arrangement amounts to a reintroduction of fuel subsidies, a policy the government has long claimed to have phased out in pursuit of liberalizing the downstream sector. He questioned the rationale behind reintroducing subsidies through the backdoor while discouraging competition.
“The other part is the transparency mechanism,” he noted. “It’s a subsidy. Subsidies benefit people. And, there’s nothing wrong with subsidy. If your policy is to remove subsidy to free the oil and gas sector, why bring back subsidy through the backdoor? Can the government find another way of doing that? Why not issue more licences for more mining?”
Adigun’s remarks reflect broader concerns from stakeholders in the energy sector who argue that the crude-for-naira arrangement not only distorts the market but also risks entrenching monopoly and discouraging competition among refiners.
He emphasized the need for a more transparent and inclusive policy that supports local refining capacity while upholding the principles of market liberalization. “Rather than depending solely on one refinery, why not empower others? Why not increase licensing, improve infrastructure, and create room for more players to participate fairly in the sector?” he suggested.
The crude-for-naira deal was initially introduced to ensure local supply of crude to Dangote Refinery in exchange for a naira-denominated transaction, amid foreign exchange challenges. However, experts like Adigun now warn that unless restructured or terminated, such deals could undermine Nigeria’s efforts to reform its petroleum industry.
