The Crude Oil Refiners Association of Nigeria (CORAN) has backed the Federal Government’s plan to sell crude oil to domestic refineries through forward contracts but questioned the proposed ₦1,350-per-litre petrol price ceiling, demanding clarity on how costs above the limit would be recovered.
CORAN said forward sales could improve feedstock certainty and reduce exposure to international price volatility but urged the government to ensure transparent pricing and equal access for large and modular refineries.
The position comes as petrol prices in Abuja have risen to about ₦1,410 per litre, above the proposed ceiling on ex-gantry or landing costs.
The Federal Government said the proposed price-modulation arrangement would require refiners and importers to absorb costs above the ceiling initially and recover the shortfall when market conditions improve.
Speaking with Punch on Sunday, CORAN spokesperson Eche Idoko said the forward-sale plan was workable but raised concerns about crude availability, pricing and existing contractual obligations.
“Have OPTS and IPPG bought into this arrangement? Who will administer it, and under what commercial terms?” he asked.
Idoko also called for affordable crude access for all domestic refiners, including modular operators, warning against a framework that favoured larger refineries.
On the proposed price ceiling, he questioned how the government arrived at the figure and who would bear the difference when production costs exceeded the limit.
“While price stability is desirable, we must be careful not to reintroduce price regulation or subsidy through the back door,” he said.
He urged the government to prioritise higher crude oil production, improved feedstock access and lower refining costs rather than administratively determining petrol prices.
The concerns come amid limited crude availability for domestic allocation. Finance Minister Taiwo Oyedele recently said Nigeria did not have up to 700,000 barrels of freely available crude daily to supply anyone, including the Dangote refinery.
Oyedele explained that production-sharing contracts, joint-venture arrangements, production costs and royalties reduced the volume available to the Federal Government.
Meanwhile, PetroleumPrice.ng Chief Executive Officer Jeremiah Olatide welcomed the forward-sale proposal, saying it could ease pressure on refiners and strengthen their bargaining power when negotiating crude prices.
“I am happy that the Federal Government has decided to listen to experts’ advice that there must be a form of intervention through crude supply to the refineries. These forward sales to local refineries are a good move,” Olatide said.
He added that the arrangement could help moderate the impact of crude oil prices on Nigeria’s downstream market.
The proposed price ceiling is part of the government’s efforts to cushion consumers against rising fuel costs. However, the difference between the proposed ₦1,350 ex-gantry ceiling and Abuja’s ₦1,410 pump price reflects additional distribution costs and retail margins.