The Crude Oil Refinery Owners Association of Nigeria, CORAN, has called for an urgent and commercially viable pricing framework for crude oil supplied to domestic refineries.
The association said Nigeria’s position as one of Africa’s largest crude oil producers was difficult to reconcile with the challenges faced by local refiners in securing adequate feedstock on workable commercial terms.
In a position paper, CORAN argued that crude supply arrangements must support the sustainability of domestic refining and reduce uncertainty for refinery operators.
The association said the issue should receive urgent attention from policymakers and regulators because the availability and pricing of crude oil directly affect the cost of refined petroleum products.
Gap between crude allocation and delivery
CORAN recalled that during the first quarter of 2026, 61.9 million barrels of crude oil were allocated to domestic refineries, while producers offered 68.7 million barrels.
However, actual deliveries stood at only 28.5 million barrels.
The figures highlight the gap between crude allocation, offers and physical delivery to domestic refining facilities.
For refinery operators, inadequate or irregular crude supply can affect production planning, plant utilisation and the cost of refined products.
Refiners require predictable access to feedstock to operate efficiently and maintain consistent output. Where crude is unavailable or supplied at commercially unattractive prices, operators may struggle to compete with imported products.
CORAN’s demand comes amid continuing debate over the relationship between domestic refining and fuel imports.
Marketers defend import activities
Some petroleum marketers reportedly blacklisted by Dangote Refinery over petrol imports have defended their activities, saying they were issued import licences by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA.
One marketer, who spoke on condition of anonymity, said the company was approached by the regulator because import substitution had become necessary to sustain fuel supply.
The marketer said the company remained willing to import petroleum products whenever market conditions and supply requirements made it necessary.
The development reflects the continuing tension between the expansion of domestic refining capacity and the need to guarantee uninterrupted fuel supply.
While local refineries are expected to reduce Nigeria’s dependence on imported petroleum products, supply shortages, logistics challenges and differences in pricing can continue to create room for imports.
Pricing remains central to refining economics
Crude oil represents one of the largest costs in the production of petrol, diesel and other refined petroleum products.
The price paid for crude, the cost of transporting it to refineries and the availability of suitable grades all affect the final price of refined products.
If domestic refiners purchase crude at prices that are not commercially competitive, locally produced fuel may struggle to compete with imported alternatives.
CORAN’s position is that a workable pricing template should reflect the realities of the Nigerian refining industry while ensuring that crude producers and refiners can operate sustainably.
Such a framework would need to address pricing transparency, supply obligations, payment arrangements, logistics and the quality of crude supplied.
Domestic refining and energy security
Nigeria’s push to expand domestic refining is linked to its broader energy security strategy.
For decades, the country depended heavily on imported petroleum products despite being a major crude oil producer.
The resulting exposure to international prices, foreign exchange shortages, shipping costs and global supply disruptions contributed to recurring fuel price volatility.
Greater domestic refining capacity could reduce those vulnerabilities, create jobs and retain more value within the Nigerian economy.
However, the benefits will depend on whether local refineries can secure reliable feedstock, access infrastructure and compete on commercial terms.
The government and regulators are therefore under pressure to create a crude supply system that supports domestic refining without undermining the interests of producers or consumers.
CORAN’s demand adds to calls for clearer coordination between the upstream and downstream petroleum sectors as Nigeria attempts to build a more integrated and competitive energy industry.
