By Christopher Sunday
In a strategic move to stabilize the domestic fuel market and prevent an imminent hike in pump prices, the Federal Executive Council (FEC) has directed the full and immediate implementation of the naira-for-crude oil swap arrangement.
The decision, which came during a high-level FEC meeting in Abuja, is seen as a deliberate policy intervention aimed at reducing Nigeria’s dependency on foreign exchange for fuel imports — a major factor in the rising cost of petroleum products. Under the naira-for-crude arrangement, crude oil is allocated directly to local refiners or partners in exchange for refined petroleum products, thereby bypassing the need to source scarce U.S. dollars to import fuel.
Government sources say the move will not only cushion the impact of global oil market volatility on the Nigerian economy but also shield ordinary citizens from a potential increase in pump prices, which could worsen inflation and deepen economic hardship.
A senior official at the Ministry of Petroleum Resources noted that the full activation of the naira-for-crude policy aligns with President Bola Ahmed Tinubu’s broader agenda of economic stabilization and energy sector reform.
“This policy helps us conserve our foreign reserves, supports local refining initiatives, and protects the masses from bearing the brunt of a deregulated downstream market. It is a practical step toward price stability,” the official said.
Analysts believe the success of this initiative depends heavily on transparency, accountability, and operational efficiency in both the upstream and downstream sectors. They also call for improved support to domestic refiners, such as the Dangote Refinery and modular refineries, to ensure a sustainable supply chain.
The decision comes at a critical time when global crude oil prices are rising and the naira remains under pressure in the foreign exchange market. Without intervention, market forces could push the cost of petrol beyond the reach of average Nigerians.
With the FEC’s directive, stakeholders are optimistic that the naira-for-crude swap could be a game-changer in insulating the country from external shocks while promoting local refining capacity and economic resilience.
