Amid a deepening crisis in Nigeria’s oil sector, President Bola Tinubu has launched sweeping reforms to revive domestic crude production, stabilize fuel prices, and bolster energy security. The overhaul comes as national oil output falls to historic lows and global crude prices tumble following new U.S. tariff announcements by former President Donald Trump, who is campaigning for re-election. In a key policy shift announced on April 9, the Federal Ministry of Finance reaffirmed that domestic refineries can continue purchasing crude oil in naira, Nigeria’s local currency—a departure from the longstanding dollar-based system. The move is part of the administration’s “Naira for Crude” initiative, which aims to promote local refining, reduce forex dependency, and strengthen energy independence.
The decision follows a high-profile dispute between the Nigerian National Petroleum Company (NNPC) and Aliko Dangote, Africa’s richest man, who operates the continent’s largest privately owned oil refinery in Lagos. Dangote temporarily halted the sale of refined fuel domestically after being required to pay for crude in U.S. dollars, a move that contributed to a sharp spike in local gasoline prices. Responding to public pressure and industry unrest, Tinubu last week fired 11 top executives at the NNPC, including its former managing director, as part of a broader push to root out inefficiency and corruption. He has since appointed Ahmadu Musa Kida as the new NNPC Chairman and Bayo Bashir Ojulari as Managing Director, tasking them with restoring credibility and boosting national production.
The NNPC, once a cash cow for the government, has in recent years faced mounting criticism over operational opacity, mismanagement, and failure to meet OPEC production quotas. Nigeria, Africa’s largest oil producer, currently pumps around 1.2 million barrels per day (bpd)—well below its OPEC quota of 1.8 million bpd—due to underinvestment, theft, and sabotage in the Niger Delta. The “Naira for Crude” strategy is viewed by analysts as a short-term lifeline for refineries like Dangote’s 650,000 bpd facility, which is key to ending Nigeria’s longstanding dependence on imported fuel. If successful, the policy could save billions in foreign exchange, curb inflation, and reinforce the country’s economic diversification agenda.
However, experts caution that unless accompanied by deeper structural reforms—such as pipeline security, deregulation of the downstream sector, and transparent crude pricing—the gains may be short-lived. As global oil markets adjust to geopolitical shifts and new U.S. trade policies, Tinubu’s aggressive intervention signals a renewed focus on leveraging Nigeria’s energy resources to drive sustainable growth and regain investor confidence.
