By Sunday Nwafor

The Nigerian National Petroleum Company Limited (NNPC Ltd.) has announced a landmark policy shift: from October, the company will be selling Premium Motor Spirit (PMS) to Nigeria’s downstream sector, particularly Dangote Refineries in Naira rather than U.S. dollars. The development, greeted with acclaim by some and criticized by others, has the potential to be a game-changer in the country’s long search for economic independence and energy self-sufficiency.

Nigeria has depended for decades on imported refined petroleum products, made worse by low refining capacity and exchange volatility. With this policy reversal, the government is signaling that it wishes to not only conserve foreign exchange but also allow local refiners to increase domestic capacity.

Notable among many who reacted to this issue is Onasanya Oluwasegun, seasoned  Petroleum Engineer and Mechanical System Specialist at Chevron’s Agbami FPSO. With nearly two decades of experience in the oil and gas industry, Onasanya weighed in on the implications of the move, offering a well-informed perspective.

According to him, deciding to price PMS sales in naira is a move that holds both economic and strategic weight. He pointed out that it alleviates the ongoing foreign exchange (FX) pressure that has been a long-standing issue for downstream operators and the economy as a whole.

“When you eliminate the need for dollars in domestic PMS transactions, you lighten the load on the Central Bank of Nigeria and bolster the naira. That’s definitely a step in the right direction,” he remarked.

Analysts are on the same page, suggesting that this decision could lessen the demand for foreign currency, which might help stabilize the naira in the short to medium term. It could also enhance liquidity in the FX market, particularly for other sectors vying for limited forex.

Beyond the broader economic advantages, this new policy seems to be a strategic move to boost Nigeria’s local refining capabilities. Industry players have often expressed frustration over the difficulties in accessing dollars for purchasing crude and other necessary inputs. By transitioning to a naira-based system, the NNPC may have removed one of the biggest obstacles facing the industry.

Onasanya pointed out that the timing of this policy is crucial. Enabling local purchases in the national currency could significantly increase profitability and operational sustainability, especially as major facilities like the Dangote Refinery and several modular refineries approach full operation.

“For indigenous players, this policy increases the viability of entry and scaling up. It promotes development, creates jobs, and may eventually result in a decrease in the price of petrol at the pump,” he continued.

Practically speaking, feedstock will now be more readily available to domestic refiners without being impacted by the unstable exchange rate. Better output and capacity utilisation could result from this, lowering the need to import refined goods and enhancing national fuel security. But there are still certain difficulties.

Transparency in pricing and regulatory clarity are urgent necessities, according to experts. Concern is that if PMS price in naira does not mirror true market dynamics, then distortions will set in so as to undermine the objective of this policy.

Onasanya stressed that a heavy regulatory oversight is required. “Implementation is critical. We need to ensure that pricing is transparent, and that the supply chain is safeguarded from exploitation and inefficiencies.”

Policy-wise, the decision is in alignment with Nigeria’s wider energy transition and industrial policy goals. Strengthening local refining, the government will hence create a stronger link between the oil sector and the domestic economy, which remains weak despite Nigeria being Africa’s leading oil producer.

The economists view the potential ripple effects throughout the value-adding chain. Saving on freight, insurance, and demurrage costs might be achieved by a decrease in reliance on imports. The contemplation also opens the gate for investments in related areas such as logistics, storage, and distribution infrastructure.

The job perspective for the sector can also improve. Increased job creation is anticipated in the medium term with refiners being in a position to access crude and with an increase in refining activities. This will in turn have multiplier effects going into other sectors and contribute to GDP growth.

In terms of public perception, the move has so far unambiguously been seen as cautiously positive. Many Nigerians are optimistic about the possibility for more sustainable and locally focused policies that provide less economic dependence. Onasanya believes that in addition to the data from this move, these policies also represent a loud and clear message.

“It means we mean business about taking back control of our resources and our future. That will be meaningful, for sure, both in terms of symbolism and materially,” he said.

To fully draw down into the implications of the policy will take months and possibly even years, but there is enough momentum with positive perception being generated that tells us it is headed in the right direction. But, there must be further reforms – such as deregulated markets, investment in infrastructure, and up-skilling and training of citizens.

As Nigeria deals with this complicated energy strategy, decisions like this will continue to determine the course of the country toward energy independence and economic resilience. For engineers like Onasanya, it represents not just a shift in policy direction, but a near huge chance to redefine how Nigeria manages and who benefits from its natural resources.

Whether this move represents a temporary patch, or a signal for permanent change, will largely be down to the level of implementation and fit with further structural reforms. For now, as it stands, selling PMS in naira presents a fresh path—one that many in the sector are watching closely, with hope and cautious confidence.