President Bola Ahmed Tinubu demonstrated strategic foresight in July 2024 when he approved the use of the naira for crude oil transactions between the Nigerian National Petroleum Company and the Dangote Refinery.
Since the launch of the naira-for-crude initiative on October 1, 2024, Nigeria has recorded a major breakthrough in energy security, particularly amid the ongoing global economic disruption triggered by the Middle East conflict involving the United States, Israel, and Iran.
The initiative, overseen by a technical committee that includes Finance Minister Wale Edun and tax chief Zacch Adedeji, has helped stabilize supply, protect the economy, and strengthen Nigeria’s energy independence.
Global Energy Crisis Deepens
The war—now in its sixth week—has significantly disrupted global energy markets, particularly following Iran’s closure of the Strait of Hormuz, a key route for over 20% of global oil and gas trade.
As a result, prices of LPG, LNG, petrol, and diesel have surged worldwide, placing immense pressure on economies. Countries across Europe, Asia, Africa, and the United States are grappling with shortages, rising costs, and emergency energy measures.
From fuel rationing in Asia to shortened business hours in Egypt and long fuel queues in parts of the United States, the crisis has exposed the fragility of global energy supply chains.
Nigeria Avoids Fuel Scarcity
Despite rising global prices, Nigeria has avoided fuel scarcity, largely due to increased local refining capacity. The Dangote Refinery in Lekki has played a pivotal role by meeting domestic demand and reducing reliance on imports.
Notably, while other countries face long queues at fuel stations, Nigeria has maintained steady product availability, with the refinery prioritizing local supply even amid lucrative export opportunities.
In a recent move to cushion the impact on citizens, the refinery reduced petrol prices by ₦75 per litre, despite rising crude oil costs and additional premiums on local crude supply.
Strategic Gains for Nigeria
The refinery’s operations have:
- Eliminated persistent fuel queues
- Reduced dependence on imports
- Cut demurrage costs previously incurred by the NNPC
- Strengthened Nigeria’s resilience against global shocks
Beyond domestic benefits, Nigeria is now emerging as a key energy exporter to African markets, supplying refined products to countries such as South Africa and Kenya. In March alone, the refinery exported nearly 500,000 tonnes of refined products across the continent.
A New Era of Energy Sovereignty
The Dangote Refinery is fast becoming more than just an industrial facility—it represents a cornerstone of Nigeria’s energy sovereignty.
By promoting local production, the country is not only preserving foreign exchange and creating jobs but also insulating itself from global volatility and geopolitical risks.
As global energy markets remain uncertain, Nigeria’s strategy—anchored on local refining and the naira-for-crude policy—positions the country as a resilient, self-sufficient, and influential player in the global energy landscape.
