The planned meeting of the Technical Sub-Committee on the Naira-for-Crude Policy has been postponed, raising new doubts about the initiative aimed at trading Nigerian crude oil in naira instead of foreign currency. Officials say the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) failed to present workable solutions, delaying progress on the policy meant to strengthen the local currency.
Challenges in Implementing the Policy
The naira-for-crude policy was introduced to reduce Nigeria’s reliance on dollar-based oil exports, conserve foreign reserves, and stabilise the naira. However, the plan faces major obstacles, including existing contracts with foreign buyers and the challenge of redirecting crude oil for local transactions.
According to an insider, the subcommittee had asked NUPRC to suggest ways to make the policy work. “The committee asked NUPRC to provide options, but they couldn’t,” the source said. “They struggled to find a way to reallocate crude away from export markets.”
Next Meeting Set for Monday
Despite the setback, officials from the Federal Ministries of Finance and Petroleum Resources have confirmed that the subcommittee will reconvene on Monday. The group is responsible for finding ways to balance Nigeria’s global oil commitments with its domestic economic goals.
NUPRC was expected to propose solutions such as reallocating crude oil to local refiners or renegotiating contracts to allow more transactions in naira. Its failure to do so has raised concerns about the policy’s feasibility, especially since Nigeria’s oil sector is dominated by international companies like Shell, Chevron, and TotalEnergies.
Economic Concerns and Currency Pressure
Nigeria exports over 1.5 million barrels of crude daily, mostly sold in dollars, making it difficult to switch to a naira-based system without affecting government revenue. “The dependence on foreign buyers keeps Nigeria stuck in a cycle of dollar reliance,” said Dr. Amina Yusuf, an energy economist.
The delay comes at a time when the naira is under pressure, trading at over ₦1,600 per dollar, while inflation remains above 30%. Supporters of the policy believe it could ease this strain by reducing demand for dollars, but critics warn that poor execution could create new economic problems.
Uncertainty Ahead
Monday’s meeting is crucial, as many expect NUPRC to present a solid plan. Some possible solutions include incentives for local refineries like Dangote’s or a gradual reduction of dollar-based sales. However, experts remain cautious. “It’s a bold idea, but execution is proving difficult,” said Chidi Okeke, a policy analyst.
For now, the delay highlights the challenges of changing Nigeria’s oil trade system. As the subcommittee prepares to meet again, the country watches closely, hoping for a breakthrough that could stabilise the naira and reshape the economy.