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President Bola Ahmed Tinubu’s naira-for-crude policy is emerging as a key buffer protecting Nigeria’s energy security amid the ongoing Middle-East crisis, according to presidential aide Temitope Ajayi. Ajayi said the decision, approved in July 2024, to allow crude oil sales in naira to the Dangote Refinery has ensured steady domestic…...

By Kazeem Kasali

President Bola Ahmed Tinubu’s naira-for-crude policy is emerging as a key buffer protecting Nigeria’s energy security amid the ongoing Middle-East crisis, according to presidential aide Temitope Ajayi.

Ajayi said the decision, approved in July 2024, to allow crude oil sales in naira to the Dangote Refinery has ensured steady domestic fuel supply despite global disruptions triggered by the conflict involving Iran, Israel and the United States.

The initiative, which took effect from October 1, 2024, is overseen by a technical committee that includes the Minister of Finance, Wale Edun, and the Executive Chairman of the Nigerian Revenue Service, Zacch Adedeji.

Ajayi argued that the policy has helped stabilise Nigeria’s economy by guaranteeing supply security, reducing exposure to foreign exchange volatility and safeguarding the country’s energy future.

The global energy market has been under severe strain following the disruption of the Strait of Hormuz, a critical shipping lane responsible for over 20 per cent of global oil and gas flows.

The closure has driven sharp increases in the prices of petroleum products worldwide, with countries across Europe, Asia and Africa facing shortages and adopting emergency measures to conserve fuel.

Despite rising prices, Nigeria has avoided the widespread scarcity seen elsewhere, with Ajayi attributing this to increased local refining capacity and the naira-for-crude arrangement.

He said the Dangote Refinery, located in Lekki, Lagos, has played a central role by meeting domestic demand and reducing reliance on imported refined products.

According to him, the facility has maintained consistent supply of petrol, diesel and other fuels, eliminating long queues that previously characterised the Nigerian market, even during peak periods.

Ajayi noted that while global crude prices have surged, local pump prices are being moderated, citing a recent reduction in petrol prices despite higher input costs faced by the refinery.

He added that local refining has also helped Nigeria cut costs associated with fuel imports, including demurrage charges previously incurred by the Nigerian National Petroleum Company.

Beyond domestic stability, the crisis has positioned Nigeria as a growing supplier of refined petroleum products to other African countries, enhancing its regional influence.

Ajayi revealed that the Dangote Refinery exported nearly 500,000 tonnes of refined products across Africa in March, boosting foreign exchange earnings and supporting supply in neighbouring markets.

He stressed that the development underscores the importance of industrialisation and local production, noting that such investments not only create jobs and conserve foreign exchange but also insulate economies from global shocks.

“The Dangote Refinery is more than an industrial asset; it is the foundation of Nigeria’s energy sovereignty and a catalyst for sustainable economic growth,” he said.