A major controversy has erupted in Nigeria’s oil sector as the Federal Government’s decision to sell crude oil in naira to the Dangote Refinery comes under heavy criticism from industry players, raising concerns over foreign exchange instability and economic risks.
The Executive Secretary of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Olufemi Adewole, has strongly condemned the move, warning that the naira-for-crude framework could trigger capital flight, weaken investor confidence, and further destabilize the country’s already volatile currency.
“The global oil market operates in US dollars due to its stability. Continuing this policy could alienate trade partners and investors who rely on the predictability of the dollar,” Adewole cautioned.
The backlash intensified after reports emerged that Dangote Refinery had suspended the sale of petrol in naira due to the government’s refusal to continue selling crude in local currency. This sudden reversal has fueled speculation that the controversial policy is already failing, with fears that it could lead to supply disruptions and an eventual hike in fuel prices.
Adewole also warned that tying crude transactions to the naira could put unsustainable pressure on Nigeria’s foreign exchange reserves, making it harder for the Central Bank of Nigeria to stabilize the naira. He cited Venezuela’s failed attempt to shift oil sales away from the US dollar as a cautionary tale, urging the government to avoid economic self-sabotage.
While the Federal Government had promoted the policy as a means to strengthen the local currency and enhance economic sovereignty, critics argue that it was poorly planned and could backfire, leading to long-term economic damage.
As uncertainty looms, oil marketers and economic experts are calling on the government to reconsider its approach before the policy inflicts further harm on Nigeria’s already struggling economy.
