Written by SpringNewsNG Media Limited – March 26, 2025

FCT, Abuja – The Centre for Energy Development and Economic Sustainability (CEDES) has called on the federal government to urgently reinstate the Naira-for-Crude policy, warning that abandoning it could lead to soaring fuel prices and economic instability.

In a statement cited by us and issued in Abuja on Tuesday, March 25, 2025, CEDES alleged that the Nigerian National Petroleum Company Limited (NNPCL) had moved to replace the Naira-for-Crude system with a dollars-for-crude arrangement. The group warned that such a move could weaken local refineries and increase Nigeria’s reliance on fuel imports.

Concerns Over Local Refining and Economic Impact

Dr. Umar Sani, Executive Director of CEDES, expressed concern that the policy shift could hinder local refineries from accessing crude oil at favorable rates, thereby reducing refining capacity within the country. He argued that the Naira-for-Crude system had ensured a steady supply of crude to Nigerian refineries, limiting dependence on costly fuel imports and preserving foreign exchange reserves.

“It is concerning that instead of strengthening local refining capacity, this shift could make it more difficult for refineries to operate effectively. The consequence could be an increased dependency on imports, which comes at the detriment of national economic stability,” Sani stated.

He further emphasized that under the previous system, the government had better control over petrol pricing and was able to curb excessive foreign exchange expenditures on fuel imports.

Potential Impact on Fuel Prices and Inflation

CEDES warned that discontinuing the Naira-for-Crude policy could trigger fuel scarcity, increased petrol costs, and heightened inflation, worsening economic hardship for Nigerians.

“With this shift, we are at risk of seeing higher petrol prices, fuel shortages, and a strain on the economy. The burden will ultimately fall on ordinary Nigerians, who are already struggling with inflation and economic uncertainty,” Sani added.

While CEDES strongly opposed the alleged policy change, the NNPCL has yet to officially respond to the claims. However, energy analysts suggest that any adjustments to the policy should be carefully examined to balance local refining needs with broader economic stability.

Calls for Government Intervention

The organization urged the http://federal government to take immediate action in reviewing and reinstating the Naira-for-Crude system, emphasizing the need to support local refining capacity as part of Nigeria’s broader energy security and economic sustainability strategy.

“We call on the government to reconsider this policy direction and prioritize the long-term benefits of local refining. Maintaining the Naira-for-Crude system will not only enhance energy security but also ensure economic stability for the country,” Sani concluded.

As discussions on fuel pricing and refinery operations continue, industry stakeholders and analysts are closely monitoring how the government will address concerns raised by CEDES and other advocacy groups. Meanwhile, Nigerians brace for potential increases in fuel prices amid economic uncertainty.