Refinery owners urge FG to curb fuel imports, back local refineries

Owners of crude oil refineries in Nigeria have called for urgent government intervention to bolster the domestic refining sector and diminish reliance on imported petroleum products. The Crude Oil Refinery Owners Association of Nigeria (CORAN) presented this plea in a recent position paper. They highlighted the challenges faced by local refinery operators, citing issues such as foreign-exchange pressures, high borrowing costs, limited access to long-term financing, supply constraints, inadequate infrastructure, and soaring logistics costs.

CORAN emphasized that these issues constitute sound industrial and energy-security policies, ultimately impacting Nigeria's economy. The association expressed concern that Nigeria, despite being one of Africa's largest crude oil producers, continues to struggle in delivering crude to domestic refineries at commercially viable rates.

In the first quarter of 2026, refinery operators were allocated 61.9 million barrels but only received 28.5 million barrels. CORAN attributed this discrepancy to pricing gaps between producers and refineries, which NUPRC identified as a major factor preventing completed transactions. While acknowledging improvements in the second quarter, the association stressed that crude allocation is insufficient without commercially sustainable conditions.

They urged consideration of pricing, transportation, evacuation infrastructure, crude quality, financing, payment arrangements, and proximity to producing assets when determining supply arrangements. CORAN also pushed for a pragmatic pricing template for crude supplied to domestic refineries, acknowledging international benchmarks like Brent, WTI, and Platts but warning against mechanical application without accounting for additional evacuation and logistics costs.

The refinery owners are particularly worried about the rise in petroleum-product imports, urging the government to ensure imports primarily serve as a supply gap filler and not as a substitute for domestic refining. They cited data showing a decline in domestic PMS supply and a rise in petrol imports during July 2026. CORAN warned that a continuous import regime could weaken incentives for existing and prospective refineries, exacerbate foreign exchange pressures, and undermine Nigeria's goal of becoming a refining and exporting hub.

The association urged that refineries be treated as industrial infrastructure, promoting a network of large, medium-sized, and modular refineries strategically located around producing basins and major consumption centers.