The Crude Oil Refinery Owners Association of Nigeria, CORAN, has urged the Federal Government to take urgent steps to strengthen Nigeria’s domestic refining industry and reduce the country’s dependence on imported petroleum products.
The association made the call in a position paper titled, “Position Paper on the Urgent Need for Strategic Government Intervention to Strengthen Nigeria’s Domestic Refining Industry,” issued on Thursday.
CORAN pointed to recent intervention by United States President Donald Trump in the American refining sector as a possible lesson for Nigeria, arguing that the country has an even stronger case for targeted government support because of the challenges confronting local refinery operators.
According to the association, domestic refiners continue to face foreign-exchange pressures, high borrowing costs, limited access to long-term financing, crude supply difficulties, inadequate infrastructure and rising logistics expenses.
“It is sound industrial policy. It is energy-security policy. And ultimately, it is economic policy,” CORAN stated.
CORAN expressed concern that Nigeria, despite being one of Africa’s largest crude oil producers, still struggles to provide sufficient crude to domestic refineries on commercially workable terms.
The association said that in the first quarter of 2026, about 61.9 million barrels were allocated to domestic refineries, while producers offered 68.7 million barrels. However, only 28.5 million barrels were ultimately delivered.
CORAN said the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, had identified pricing differences between crude producers and domestic refiners as one of the major reasons some crude offered did not result in completed transactions.
The association, however, acknowledged improvements in the second quarter, when NUPRC reported that 53.7 million barrels of crude oil and condensate were supplied to local refineries.
That figure represented a reported 97.4 per cent performance under the Domestic Crude Supply Obligation.
“CORAN acknowledges and commends this improvement,” the association said. However, it stressed that crude allocation figures alone would not solve the problem unless the crude was actually delivered under commercially sustainable conditions.
“A refinery does not consume an allocation on paper. It consumes crude delivered under commercially sustainable terms,” CORAN stated.
The refinery owners called for greater attention to the commercial conditions surrounding domestic crude supply.
They said factors such as crude pricing, transportation, evacuation infrastructure, crude quality, financing, payment arrangements and the distance between producing assets and refineries should be considered when determining supply arrangements.
CORAN also called for a commercially sensible 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 they should not be applied mechanically when domestic refiners are also required to shoulder separate evacuation and logistics costs.
It proposed a Domestic Refinery Crude Pricing Framework that would take into account international crude benchmarks, quality differentials, the actual delivery point, avoided international freight and insurance costs, domestic logistics expenses, proximity between producing fields and refineries and reasonable commercial margins for producers. “The objective is not subsidized crude. The objective is correctly priced crude,” CORAN stated.
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The association also raised concerns about the resurgence of petroleum-product imports and urged the government to ensure that imports increasingly serve only to address genuine supply shortfalls.
CORAN cited data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, which showed that domestic Premium Motor Spirit supply fell from approximately 32.5 million litres per day in June 2026 to 25.8 million litres per day in July.
Over the same period, petrol imports increased from about 18.1 million litres to 19.7 million litres per day.
The association stressed that Nigeria still needs adequate petroleum-product stocks and said it was not advocating policies that could create artificial shortages.
However, it warned that allowing a continuous import regime to operate alongside growing domestic refining investments could weaken incentives for both existing and prospective refinery operators.
CORAN argued that sustained imports could increase pressure on foreign exchange, reduce domestic employment and refining opportunities, expose the country to international freight disruptions and geopolitical shocks, and undermine Nigeria’s ambition to become a petroleum-product refining and export hub.
It therefore called for import licenses to increasingly reflect independently verified domestic production levels and genuine supply gaps.
The association also said locally refined products that meet equivalent quality and commercial requirements should receive priority in the Nigerian market.
CORAN identified access to affordable and long-term financing as one of the biggest obstacles facing Nigeria’s emerging refining industry.
The association noted that refineries require significant investment in processing units, storage facilities, utilities, pipelines, loading infrastructure, environmental systems, laboratories, fire-protection equipment and working capital.
It urged the Federal Government to treat refineries as strategic industrial infrastructure rather than simply as downstream petroleum businesses.
“Every barrel refined within Nigeria has the potential to retain economic value that would otherwise leave the country,” CORAN stated.
According to the association, stronger domestic refining capacity could support employment and create opportunities across engineering, fabrication, transportation, petrochemicals, lubricants, plastics, construction and other related industries.
It also argued that increased local refining could help conserve foreign exchange by reducing the need to import petroleum products.
The association called for the development of a broad refining ecosystem involving large, medium-sized and modular refineries strategically located near crude-producing areas and major consumption centres.
CORAN said Nigeria’s refining ambition should not depend on the success of a single facility but should involve a network capable of supporting domestic demand and eventually serving regional markets.
“The success of one refinery should not mark the completion of Nigeria’s refining ambition. Nigeria requires an ecosystem,” it stated.
The association also urged the government to improve supporting infrastructure, particularly pipelines, storage terminals and transportation systems, which it said are essential to the long-term viability of domestic refining.
To address the challenges facing the industry, CORAN called for an urgent Presidential Refining Industry Roundtable.
The proposed meeting would bring together refinery operators, NUPRC, NMDPRA, NNPC Limited, crude producers, financial institutions, infrastructure investors and relevant government ministries.
CORAN proposed 10 priority measures, including the full institutionalization of naira-for-crude transactions, development of a domestic crude pricing framework and stronger enforcement of the Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act.
It also proposed greater use of crude swaps, a progressive reduction in petroleum-product imports, a dedicated refinery development financing framework and the development of shared petroleum-product infrastructure.
Other recommendations include the establishment of strategic petroleum-product reserves and regulatory and fiscal incentives for refinery expansion.
CORAN particularly urged the government to encourage investments in refinery conversion units that can increase domestic production of PMS, Automotive Gas Oil, aviation fuel and Liquefied Petroleum Gas.
The association said government policy should increasingly focus on supporting productive capacity rather than subsidizing consumption.
“Government intervention should therefore increasingly move away from subsidizing consumption and toward enabling production,” CORAN stated.
It urged the government to support the entire petroleum value chain, including refineries, pipelines, storage terminals, access to commercially priced Nigerian crude and long-term industrial financing.
CORAN said Nigeria should ultimately position itself as a major refining hub for Africa by making greater use of its crude resources to support domestic industries and regional petroleum-product supply.
The association argued that continuing to export crude while importing refined petroleum products imposes significant economic costs on the country.
“Nigeria should not continue exporting crude, exporting jobs and importing the same petroleum products at considerable economic cost,” it stated.
CORAN said the long-term objective should be for Nigerian crude to increasingly supply Nigerian refineries, with those refineries meeting domestic demand and eventually supplying markets across Africa. “That should be the destination of petroleum-sector reform,” the association stated.
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