The Crude Oil Refinery Owners Association of Nigeria (CORAN) has called on the Federal Government to urgently strengthen the country’s domestic refining industry and reduce its dependence on imported petroleum products.
The association, in a position paper titled “Position Paper on the Urgent Need for Strategic Government Intervention to Strengthen Nigeria’s Domestic Refining Industry,” said Nigeria could draw lessons from recent intervention by United States President Donald Trump in the American refining sector.
CORAN argued that Nigeria had an even stronger case for strategic government intervention, given the challenges confronting local refinery operators, including foreign exchange pressures, high borrowing costs, limited access to long-term financing, crude supply constraints, inadequate infrastructure and rising logistics costs.
“It is sound industrial policy. It is energy-security policy. And ultimately, it is economic policy,” the association stated.
CORAN expressed concern that Nigeria, despite being one of Africa’s largest crude oil producers, continued to struggle to supply domestic refineries with sufficient crude on commercially viable terms.
The association disclosed that during the first quarter of 2026, about 61.9 million barrels of crude were allocated to domestic refineries, while producers offered 68.7 million barrels. However, only 28.5 million barrels were actually delivered.
According to CORAN, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) identified pricing disparities between crude producers and domestic refiners as one of the major factors preventing crude offers from translating into completed transactions.
The association, however, acknowledged an improvement in the second quarter, noting that NUPRC reported the supply of 53.7 million barrels of crude oil and condensate to local refineries, representing a reported Domestic Crude Supply Obligation performance of 97.4 per cent.
“CORAN acknowledges and commends this improvement,” it stated.
It, however, stressed that crude allocation alone was not enough, arguing that what mattered to refinery operators was the actual delivery of crude under commercially sustainable conditions.
“A refinery does not consume an allocation on paper. It consumes crude delivered under commercially sustainable terms,” CORAN stated.
The association therefore called for crude supply arrangements to take into account pricing, transportation, evacuation infrastructure, crude quality, financing, payment arrangements and the proximity of refineries to producing assets.
CORAN also demanded the introduction of a commercially viable pricing template for crude supplied to domestic refineries.
While acknowledging the usefulness of international benchmarks such as Brent, WTI and Platts, the association argued that such benchmarks should not be applied mechanically when domestic refiners are also required to bear additional evacuation and logistics costs.
It proposed a Domestic Refinery Crude Pricing Framework that would consider internationally recognised crude benchmark values, quality differentials, actual delivery points, avoided international freight and insurance costs, domestic evacuation and logistics expenses, proximity between producing fields and refineries, and reasonable commercial margins for producers.
“The objective is not subsidised crude. The objective is correctly priced crude,” CORAN stated.
The refinery owners also raised concern over the resurgence of petroleum-product imports, urging the government to ensure that imports increasingly serve only as a mechanism for addressing genuine supply shortfalls.
Citing data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), CORAN said domestic Premium Motor Spirit (PMS) supply fell from approximately 32.5 million litres per day in June 2026 to 25.8 million litres per day in July, while petrol imports increased from about 18.1 million litres to 19.7 million litres per day.
The association stressed that Nigeria required adequate petroleum-product stocks and was not advocating policies that could create artificial shortages.
It warned, however, that maintaining a continuous import regime alongside increasing domestic refining investment could undermine incentives for existing and prospective refinery operators.
“A continuous import regime existing alongside substantial domestic refining investment exports Nigerian jobs and refining margins, places additional demand on foreign exchange, weakens investment incentives for existing and prospective refineries, exposes Nigeria to international freight disruptions and geopolitical shocks, and ultimately undermines the country’s aspiration to become a petroleum-product refining and export hub,” it stated.
CORAN consequently called for import licences to be increasingly calibrated against independently verified domestic production and actual supply gaps.
It further urged the government to give priority to locally produced petroleum products that meet equivalent specifications and commercial requirements.
On financing, the association identified access to affordable and long-term capital as one of the biggest constraints facing Nigeria’s emerging refining industry.
It noted that refineries are capital-intensive projects requiring substantial investment in processing units, storage facilities, utilities, pipelines, loading facilities, environmental infrastructure, laboratories, fire-protection systems and working capital.
CORAN therefore urged the Federal Government to treat refineries as strategic industrial infrastructure rather than merely downstream petroleum businesses.
“Every barrel refined within Nigeria has the potential to retain economic value that would otherwise leave the country,” it stated.
According to the association, domestic refining has the potential to generate employment and stimulate engineering services, fabrication, transportation, petrochemicals, lubricants, plastics, construction materials and other related industries, while also conserving the country’s foreign exchange.
It called for the development of a network comprising large, medium-sized and modular refineries strategically located around crude-producing basins and major consumption centres.
“The success of one refinery should not mark the completion of Nigeria’s refining ambition. Nigeria requires an ecosystem,” CORAN stated.
To address the challenges facing the sector, the association called on the Federal Government to convene an urgent Presidential Refining Industry Roundtable involving CORAN, NUPRC, NMDPRA, NNPC Limited, crude oil producers, financial institutions, infrastructure investors and relevant ministries.
CORAN proposed 10 priority measures, including the full institutionalisation of naira-for-crude transactions, development of a domestic crude pricing template, stronger enforcement of the Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act and increased use of crude swaps.
