Refiners Want Naira-For-Crude Back, And That Is A Bigger Ask Than It Sounds
Lagos · Monday 7 September 2026
Nigerian refinery owners have asked the federal government to step in and put a naira-for-crude arrangement on a formal footing. It sounds like a technical request about invoicing. It is really a request about who carries exchange-rate risk.
What the arrangement means
Under a naira-for-crude framework, domestic refiners buy Nigerian crude priced and settled in naira rather than in dollars. The refiner then sells refined products in naira to Nigerian buyers.
Why the government is not obviously the winner
Crude sold abroad earns foreign currency, which is what the reserves are made of and what the federation uses to defend the naira and service external obligations. Crude sold domestically in naira does not.
| Route | Government receives | Refiner risk |
|---|---|---|
| Export the crude | Dollars | High, buys input in dollars |
| Sell domestically in naira | Naira | Low, matched currencies |
The framework does not remove the exchange-rate exposure. It relocates it.
Somebody has to hold the currency risk in a country that imports refined products and exports crude. The argument is only ever about who.
The case for doing it anyway
Domestic refining capacity is the only durable answer to a pump price set by import parity. A refining sector that cannot plan will not expand, and a country that refines its own fuel is far less exposed to the shocks that have driven Nigerian pump prices in the last two years.
There is also a straightforward efficiency point. Shipping crude out and refined product back in adds freight, insurance and margin at every step, all of which ends up in the price at the pump in Abuja.
What should be published if it goes ahead
- The exchange rate used, and how often it is reset.
- The volumes allocated, by refiner.
- The revenue difference against exporting the same barrels.
Without those three numbers, a naira-for-crude framework is a subsidy whose size nobody outside government can calculate. That is the version Nigeria has had before.
Reporting: THISDAY and refinery operators' published statements.
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