Naira Crude Policy Fuels Hope for Cheaper Petrol

Naira crude policy fuels hope as marketers push dangote refinery to cut pump prices amid forex gains and local refining boost.

The Hope Behind Naira Crude: Nigerians Eye Cheaper Petrol

As Nigerians continue to navigate the realities of post-subsidy living, a new front has emerged in the battle for economic relief petrol pricing.

The recent comments from the Independent Petroleum Marketers Association of Nigeria (IPMAN)

have opened up a broader national discussion on the potential for further price drops in fuel,

particularly as the Dangote Petroleum Refinery begins local production at full throttle.

But beneath the numbers, a much deeper story unfolds a tale of foreign exchange policy, local refining optimism,

and a changing energy landscape that could shape household spending and business costs for years to come.

The Dangote Effect: A Game Changer or Not Yet Enough?

At the heart of the conversation is Aliko Dangote’s multibillion-dollar refinery, which began pumping out diesel and petrol earlier this year.

His announcement that Nigerians now pay just 55% of what neighbouring West African countries spend on petrol has stirred mixed reactions.

Petrol is currently sold from the Lekki-based facility at about N815–N825 per litre, significantly lower than the average N1,600 per litre ($1) in nearby countries.

For some, this represents significant progress.

But for many Nigerians, especially the petroleum marketers on the front lines, the story doesn’t end there.

Marketers Disagree: “It Should Be Lower”

Chinedu Ukadike, the Publicity Secretary of IPMAN, voiced what many have been thinking: while petrol prices have improved, they should be even cheaper.

“If Dangote is receiving crude in naira, then the pump price should reflect those savings,” Ukadike told the press.

According to him, current petrol pricing doesn’t fully account for the forex waivers and domestic currency incentives given to the refinery.

He believes Nigerians should be paying around N750 per litre, thanks to reduced dependence on foreign exchange and the elimination of import-related landing costs.

Understanding the Naira Crude Policy

A major piece of this puzzle is the Federal Government’s decision to allow Dangote Refinery to purchase crude oil in naira instead of U.S. dollars.

The move, though controversial in some circles, was designed to reduce pressure on Nigeria’s foreign reserves and give local refineries the edge needed to drive down fuel costs.

According to President Bola Tinubu, the initiative has worked at least in part.

It has improved availability and reduced Nigeria’s reliance on imported petrol.

However, the full economic benefit is yet to reach everyday Nigerians, and that’s where tension is building.

Petrol Pricing in Nigeria: Still a Work in Progress

While the availability of fuel has significantly improved thanks to the Dangote refinery marketers argue that affordability still lags behind.

“The queues may be gone, but for the average keke rider or market woman,

petrol at N825 is still unaffordable,” said Mrs. Mojisola Adeyemi, a Lagos-based businesswoman who commutes 20km daily to supply goods.

Experts agree. They note that while infrastructure has improved, the final pump price remains sensitive to the naira-dollar exchange rate, which continues to fluctuate wildly.

Forex Still a Factor: The Exchange Rate Dilemma

Dangote’s refinery may not depend on dollars to buy crude, but other operational inputs still hinge on the volatile forex market.

Spare parts, imported additives, and even certain technical services are priced in dollars.

At the time of writing, the naira trades at about N1,600 to the dollar.

Marketers argue that if the exchange rate stabilizes around N1,200–N1,100, then petrol prices could drop to N750 or lower.

“There’s a direct correlation between naira strength and pump prices. It’s not just about crude,” Ukadike added.

What Dangote Has Done Right: Availability Over Scarcity

It’s not all criticism. Both government officials and private stakeholders acknowledge that Dangote has already solved one major problem: fuel scarcity.

Before his refinery came online, long queues at filling stations were a norm, often sparked by import delays or global oil price spikes.

Now, availability has become more consistent, offering consumers a sigh of relief even if prices are still tough to swallow.

“It’s a journey,” said energy economist Dr. Nafisat Sule. “We’ve crossed the hurdle of availability. The next step is making it affordable.”

A Regional Perspective: Nigerians Still Pay Less

Despite the grumbling, it’s worth noting that Nigerians pay significantly less than their West African neighbours.

In Ghana, petrol costs over $1.1 per litre, and in countries like Togo and Benin, the story is similar.

Dangote’s decision to peg prices around N815–N820 ensures that Nigerians pay roughly 45% less than these countries, a fact Dangote has emphasized during his meetings with ECOWAS officials.

This regional pricing advantage could eventually translate to increased industrial competitiveness, especially in agriculture and manufacturing.

Beyond Petrol: Diesel and Other Refined Products

Interestingly, Dangote’s biggest price victory so far may not be in petrol but in diesel.

Since local production began, the price of diesel has dropped from N1,700 to just over N1,000 a sharp decline that’s already benefiting logistics firms, transporters, and manufacturers.

This has led to cost reductions across various sectors, from agriculture to mining, where diesel is a core input.

Marketers and economic observers now expect a similar outcome for petrol if the government’s macroeconomic policies can support refinery operations.

What Needs to Happen Next

According to stakeholders, several key things must happen for Nigerians to feel the full benefits of local refining:

1. Strengthen the Naira: Continued efforts to stabilize the naira will directly impact pump prices.

2. Improve Refinery Output: Full operational capacity at Dangote’s facility (650,000 barrels/day) must be maintained to ensure supply meets national demand.

3. Transparent Pricing Models: Industry insiders suggest that open, clear pricing formulas will help build trust and guide expectations.

4. Support for Other Refineries: Other modular refineries, such as Waltersmith and BUA, need similar naira-for-crude access to create healthy competition.

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Multiple Views on the Matter

The Government’s View:

Officials maintain that the long-term vision is on course.

“We are moving toward energy independence,” a spokesperson from the Ministry of Petroleum Resources said.

The Marketer’s View:

IPMAN continues to pressure for transparency. “If we get naira for crude, why are we still paying as if it’s dollar-based?” they ask.

The Consumer’s View:

For many Nigerians, the question is simple: When will the savings reach us? Until then, the N820 pump price feels like a partial win.

Conclusion: More Than Just a Price Debate

The issue of petrol pricing in Nigeria is not just about economics; it’s about trust, equity, and transparency.

The naira crude policy may have laid the foundation for energy independence, but implementation and accountability will determine whether Nigerians truly benefit.

There’s cautious optimism in the air.

If naira crude policy petrols continue and the naira stabilizes petrol could indeed drop to N750 or lower, a milestone that would represent more than just savings at the pump.

It would signal a genuine shift in Nigeria’s energy sovereignty.