LAGOS — The Crude Oil Refinery-Owners Association of Nigeria (CORAN) has called for a fundamental shift in Nigeria’s petroleum industry, urging the Federal Government to prioritise domestic crude supply to refineries and progressively reduce dependence on imported petroleum products
Speaking at the 3rd Nigeria Oil Refining Summit, CORAN said Nigeria could no longer afford to remain a major crude oil exporter while importing refined petroleum products at significant economic cost.
The association said the next phase of Nigeria’s petroleum-sector reform should focus on connecting the country’s abundant crude resources with domestic refining capacity, describing the linkage as critical to energy security, job creation, industrialisation and foreign-exchange retention.
According to CORAN, the debate around refining has evolved beyond Nigeria becoming a net exporter of petroleum products to a broader objective of strengthening Africa’s energy security and positioning Nigeria as a regional refining and industrial hub.
Crude supply remains critical challenge
CORAN acknowledged the growing contribution of domestic refining to Nigeria’s fuel supply but said significant structural challenges continue to constrain the sector.
It identified access to crude at commercially viable prices as one of the major problems confronting some domestic refineries, even as petroleum-product imports continue and parts of Nigeria’s refining capacity remain underutilised.
The association argued that domestic refining should not be measured only by the volume of petrol and other fuels produced.
Rather, it said, refining must be viewed as an industrial value-chain opportunity capable of retaining foreign exchange, creating employment, developing Nigerian technical expertise and supporting petrochemicals, manufacturing and other downstream industries.
“Refining for value means more than producing fuel,” the association said, stressing that Nigeria must capture a greater share of the economic value generated from its crude resources.
CORAN seeks full implementation of naira-for-crude
Among its proposals, CORAN called for the full institutionalisation of the naira-for-crude arrangement, with transparent eligibility criteria and access for qualifying domestic refineries, including modular plants.
It also proposed a domestic crude-pricing framework that would take into account crude quality, delivery points, avoided international logistics costs and the actual cost of evacuating crude within Nigeria.
The association further called for stronger enforcement of the Domestic Crude Supply Obligation (DCSO) provided for under Section 109 of the Petroleum Industry Act, while allowing commercially workable arrangements between producers and refiners.
It also proposed crude swaps and proximity-based supply arrangements under which crude-producing assets located close to domestic refineries could supply those facilities without routing crude through distant export infrastructure.
Import reduction urged
CORAN called for a progressive reduction in petroleum-product imports, arguing that imports should increasingly be limited to objectively established domestic supply gaps and strategic-stock requirements.
It said such a policy would provide stronger incentives for investment in domestic refining while reducing Nigeria’s exposure to international petroleum-product markets and foreign-exchange pressures.
The association also proposed a Refinery Development Financing Framework that would provide long-tenor financing, guarantees and refinancing mechanisms for new refinery projects and the expansion of existing capacity.
Infrastructure investment critical
According to CORAN, expanding refining capacity without developing the supporting infrastructure would limit the sector’s ability to deliver its full economic potential.
It therefore called for greater investment in shared petroleum infrastructure, including pipelines, depots, storage terminals, jetties, rail evacuation systems and other common-carrier facilities.
The association also proposed the establishment of strategic petroleum-product reserves capable of cushioning temporary refinery shutdowns, scheduled maintenance and disruptions to international supply.
It further urged regulatory and fiscal incentives for refinery expansion, particularly investments in conversion units capable of increasing domestic output of petrol, aviation fuel, LPG and other essential products.
Nigeria needs a clear refining roadmap
CORAN also called for a clearly defined national refining roadmap with measurable targets for refining capacity, domestic market share, petroleum-product imports and eventual exports.
It said the objective should be to progressively move Nigeria from a crude-exporting economy to one in which locally produced crude increasingly feeds domestic refineries, while locally refined products meet a larger share of domestic and regional demand.
“Nigeria should not continue exporting crude, exporting jobs and importing the same petroleum products at considerable economic cost,” the association said.
It said Nigeria’s crude should increasingly power its refineries, while domestic refineries should increasingly supply the Nigerian market, with the ultimate goal of making the country a refining hub for Africa.
Industry collaboration needed
CORAN said achieving the transformation would require sustained cooperation among oil producers, regulators, refiners, marketers, financiers, host communities and the media.
It urged stakeholders at the summit to move beyond policy statements and communiqués and focus on practical solutions, measurable commitments and partnerships capable of surviving beyond the event.
The association said every stakeholder should leave the summit with a commitment to bring Nigerian crude closer to Nigerian refineries and make Nigerian refineries more responsive to the needs of the domestic market.
It argued that every additional barrel refined locally could translate into more jobs, stronger opportunities for Nigerian businesses, greater value retention and improved energy security.
CORAN said the country had reached a point where the success of petroleum-sector reform would depend not only on policy changes but on how effectively the upstream, midstream and downstream segments were connected.
The association’s central message was encapsulated in its call to “refine more, import less and create more value and jobs”, with the broader ambition of transforming Nigerian crude into greater domestic prosperity.
