The Nigerian Federal Government has directed the Nigerian National Petroleum Company Limited (NNPC) to continue selling crude oil to the Dangote Refinery in naira, aiming to alleviate pressure on the nation’s foreign exchange reserves. This decision is part of a broader strategy to stabilize the naira and reduce the demand for foreign currencies in domestic transactions.

Background of the Naira-for-Crude Initiative

In July 2024, the government authorized NNPC to sell crude oil to local refineries, including the Dangote Refinery, in naira. This policy was designed to decrease the demand for U.S. dollars and support the local currency. The Dangote Refinery, with a capacity of 650,000 barrels per day, commenced production in early 2024 and has been a focal point in Nigeria’s efforts to achieve energy self-sufficiency Implementation and Challenges.