By The Crude Oil Refinery Owners Association of Nigeria is calling on the Federal Government to move urgently on strengthening the country’s domestic refining industry and cutting its reliance on imported petroleum products. CORAN made the case in a position paper released Thursday, titled “Position Paper on the Urgent Need for Strategic Government Intervention to Strengthen Nigeria’s Domestic Refining Industry,” pointing to US President Donald Trump’s recent intervention in the American refining sector as a model Nigeria could learn from.
The association argued Nigeria’s case for intervention is, if anything, stronger than America’s, given the combination of pressures local refiners already face: foreign-exchange volatility, high borrowing costs, limited access to long-term financing, crude supply bottlenecks, weak infrastructure, and steep logistics costs. “It is sound industrial policy. It is energy-security policy. And ultimately, it is economic policy,” the association said.
The crude supply gap
CORAN’s central frustration is that Nigeria, despite ranking among Africa’s largest crude producers, still struggles to get crude to its own refineries on workable commercial terms. The numbers from early 2026 illustrate the problem: in the first quarter, 61.9 million barrels were allocated to domestic refineries and producers offered 68.7 million barrels, yet only 28.5 million barrels were actually delivered. The Nigerian Upstream Petroleum Regulatory Commission traced much of that shortfall to pricing disagreements between producers and refiners that kept allocated volumes from turning into real transactions.
Things improved by the second quarter, with NUPRC reporting 53.7 million barrels of crude and condensate supplied to local refineries, a 97.4 percent Domestic Crude Supply Obligation performance rate that CORAN was quick to acknowledge. Still, the association insisted that allocation figures alone don’t tell the full story. “A refinery does not consume an allocation on paper. It consumes crude delivered under commercially sustainable terms,” it said, calling for pricing, transportation, evacuation infrastructure, crude quality, financing arrangements and proximity to producing fields to all factor into how supply deals get structured.
A new pricing framework
CORAN wants a dedicated Domestic Refinery Crude Pricing Framework built specifically for the local market. While it accepts that benchmarks like Brent, WTI and Platts remain useful reference points, it argues they shouldn’t be applied without adjustment when refiners are also absorbing separate evacuation and logistics costs on top of the benchmark price. The proposed framework would weigh internationally recognised crude values, quality differentials, actual delivery points, freight and insurance costs avoided by sourcing domestically, local evacuation expenses, distance between producing fields and refineries, and a reasonable margin for producers. “The objective is not subsidised crude. The objective is correctly priced crude,” the association clarified.
Imports creeping back up
The refinery owners also flagged a worrying trend in the products market. Citing NMDPRA data, CORAN noted that domestic petrol supply dropped from about 32.5 million litres a day in June to 25.8 million litres in July, even as petrol imports climbed from roughly 18.1 million to 19.7 million litres daily over the same period. The group was careful to say it isn’t pushing for policies that would create artificial shortages or leave Nigeria under-stocked, but it warned that letting imports rise alongside heavy domestic refining investment sends the wrong signal to the market. “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 said.
Its remedy is to tie import licences more closely to independently verified gaps between domestic production and demand, giving priority in the local market to Nigerian-made products that meet equivalent specifications and commercial requirements.
Financing remains the biggest hurdle
Access to capital, CORAN said, is arguably the single largest obstacle facing Nigeria’s emerging refining sector. Building a refinery demands heavy investment across processing units, storage, utilities, pipelines, loading facilities, environmental systems, laboratories, fire-protection infrastructure and working capital, costs that put real refining capacity out of reach without dedicated financing support.
The association pushed back against treating refineries as just another downstream petroleum business, framing them instead as core industrial infrastructure. “Every barrel refined within Nigeria has the potential to retain economic value that would otherwise leave the country,” it said, pointing to the ripple effects across employment, engineering, fabrication, transportation, petrochemicals, lubricants, plastics and construction materials. Rather than betting on a handful of large facilities, CORAN wants a distributed network of large, medium and modular refineries positioned near both 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,” it said.
A ten-point plan
To move things forward, CORAN is calling on the Federal Government to convene an urgent Presidential Refining Industry Roundtable bringing together the association, NUPRC, NMDPRA, NNPC Limited, crude producers, financial institutions, infrastructure investors and relevant ministries. Among its ten proposed priority actions: fully institutionalising naira-for-crude arrangements, building out the domestic crude pricing template, tightening enforcement of the Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act, expanding the use of crude swaps, progressively scaling back product imports, establishing a refinery development financing framework, developing shared petroleum-product infrastructure, and setting up strategic petroleum-product reserves. It also wants regulatory and fiscal incentives aimed specifically at refinery expansion, particularly investments that boost domestic output of petrol, diesel, aviation fuel and LPG. “Government intervention should therefore increasingly move away from subsidising consumption and toward enabling production,” the statement said.
Accordingly, CORAN closed its position paper with a clear statement of ambition, arguing that Nigeria’s refining sector shouldn’t just serve its own market but eventually anchor the continent’s. “Nigeria should not continue exporting crude, exporting jobs and importing the same petroleum products at considerable economic cost. Our crude must increasingly power our refineries. Our refineries must increasingly supply our market. And Nigeria must ultimately become a refining hub for Africa. That should be the destination of petroleum-sector reform,” it said.
(Punch)
