- The Petroleum Products Retail Outlets Owners Association of Nigeria said the naira-for-crude policy will shield Nigeria’s economy from the global market volatility
- PETROAN said the policy would also lead to fuel price reduction
- It highlighted the combined impact of the United States' tariffs imposition and the sudden output increase by the Organisation of Petroleum Exporting Countries and Allies on global oil prices
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) says the Federal Government’s naira-for-crude policy will insulate Nigeria’s economy from the global market volatility.
This follows the government’s announcement on Wednesday, April 9, that the initiative would be fully implemented after the first phase ended on March 31. The government said the deal would reduce fuel importation and foreign exchange pressure.
The National President of PETROAN, Billy Gillis-Harry, said that despite fluctuations in global crude oil prices, the naira-for-crude policy would ensure the stability of Nigeria’s downstream sector.
According to a statement issued on Thursday, April 10, by Joseph Obele, PETROAN’s spokesperson, Gillis-Harry noted that the policy would also reduce dependence on foreign exchange and promote local refining.
“As the global crude oil price continues to fluctuate, PETROAN is optimistic that the Naira-for-Crude policy will help to insulate the Nigerian economy from the volatility of the global market.
“By reducing the country’s dependence on foreign exchange and promoting local refining, the policy is expected to lead to greater stability in the downstream sector and more affordable fuel prices for consumers,” the statement read.
Policy to lead to fuel price reduction – PETROAN
Gillis-Harry also expressed optimism that the policy would lead to a corresponding reduction in the price of petrol.
He said this expectation is because local refineries would produce products at a cheaper price and consequently pass it on to consumers.
“PETROAN National President believes that with the naira-for-crude policy in place, the benefits of lower global crude prices will be passed on to consumers, leading to more affordable fuel prices.
“This expectation is based on the understanding that local refineries will be able to produce petroleum products at a lower cost, which will then be reflected in the prices charged to consumers,” he stated.
Oil price drop due to OPEC+ output increase, US tariffs
PETROAN also highlighted the combined impact of the sweeping tariffs imposed by the United States and the sudden output increase by the Organisation of Petroleum Exporting Countries and Allies (OPEC+).
OPEC+ announced on Thursday, April 3, that it would increase production to 411,000 barrels per day (bpd) in May, up from the previously planned 135,000 bpd.
It said the move follows eight member countries’ decision, after a virtual meeting, to phase out oil output cuts.
“Dr Billy Harry mentioned that the core reason for the global crude oil price drop is the weakening global demand due to economic slowdowns in major economies, coupled with increased production from non-OPEC countries, leading to a supply glut in the market.
“Additionally, President Trump’s recent policy of imposing reciprocal tariffs has also contributed to the decline in crude oil prices, as it has dampened global economic growth and led to a recession, further depressing oil prices,” the statement added.
Nigeria to sell crude oil in naira to boost local refineries, economy
Meanwhile, TheRadar earlier reported that the Federal Government said the introduction of the sale of crude oil in naira was a strategic step towards enhancing the operational efficiency of local refineries, as well as reducing foreign exchange risks and transaction costs.
This initiative, which is part of broader energy sector reforms, was disclosed by President Bola Tinubu during the opening of the eighth edition of the Nigeria International Energy Summit (NIES) in Abuja on Tuesday.
