Nigeria’s refinery operators have called for a progressive reduction in petroleum-product imports, arguing that continued reliance on imported fuels could weaken investment in the country’s expanding domestic refining industry and increase pressure on foreign exchange.
The refiners, under the Crude Oil Refinery Owners Association of Nigeria (CORAN), made the demand in a position paper titled Position Paper on the Urgent Need for Strategic Government Intervention to Strengthen Nigeria’s Domestic Refining Industry.
They urged the Federal Government to increasingly limit imports to situations where domestic production is unable to meet verified market requirements, while giving locally refined products priority where they meet the required specifications and commercial conditions.
The association cited data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority showing that domestic petrol supply declined from about 32.5 million litres per day in June 2026 to 25.8 million litres per day in July, while petrol imports increased from approximately 18.1 million litres per day to 19.7 million litres per day over the same period.
The refiners said Nigeria still needed sufficient petroleum-product stocks and stressed that their position was not aimed at creating artificial shortages. However, they warned that maintaining a continuous import regime while investing heavily in domestic refining could undermine the economics of existing and prospective refineries.
According to the association, sustained imports could result in Nigerian jobs and refining margins moving abroad, increase foreign-exchange demand, weaken incentives for further refinery investment and expose the country to international freight disruptions and geopolitical shocks.
It said the situation could also undermine Nigeria’s ambition to become a petroleum-product refining and export hub.
The group therefore proposed that import licences should increasingly be linked to independently verified domestic production and supply gaps.
The refiners also called for government intervention to address one of the industry's major constraints: access to competitively priced Nigerian crude.
Despite Nigeria’s position as one of Africa’s largest crude producers, the association said domestic refineries continued to face difficulties securing crude under commercially workable terms.
It reported that 61.9 million barrels were allocated to domestic refineries in the first quarter of 2026, while producers offered 68.7 million barrels. Actual deliveries, however, stood at only 28.5 million barrels.
CORAN said the Nigerian Upstream Petroleum Regulatory Commission had identified pricing differences between crude producers and domestic refiners as one of the major factors preventing offered crude from translating into completed transactions.
The association acknowledged a significant improvement in the second quarter, when NUPRC reported that 53.7 million barrels of crude oil and condensate were supplied to local refineries, representing a reported 97.4 per cent performance under the Domestic Crude Supply Obligation.
It welcomed the improvement but maintained that crude allocation figures alone could not resolve the industry's supply problems.
The refiners argued that crude must be physically delivered under commercially sustainable conditions, taking into account factors beyond the volume allocated.
They called for crude supply arrangements to consider pricing, transportation, evacuation infrastructure, crude quality, financing, payment terms and the distance between producing assets and refineries.
The association also proposed a Domestic Refinery Crude Pricing Framework to establish a more commercially viable basis for crude supplied to local refineries.
Under the proposed framework, international benchmarks such as Brent, West Texas Intermediate and Platts would remain relevant reference points, but the refiners argued that they should not be applied mechanically where domestic refiners also bear separate evacuation and logistics expenses.
The proposed pricing mechanism would consider international crude benchmarks, quality differentials, the actual point of delivery, savings from avoided international freight and insurance, domestic evacuation and logistics costs, proximity between producing fields and refineries, and reasonable commercial margins for crude producers.
CORAN stressed that its proposal was not for subsidised crude but for a pricing structure that properly reflects the economics of domestic supply.
The association also identified financing as a major obstacle to the development of Nigeria’s refining capacity.
It said refineries require substantial capital for processing units, storage facilities, utilities, pipelines, loading infrastructure, environmental systems, laboratories, fire-protection facilities and working capital.
Against this backdrop, the refiners urged the Federal Government to recognise refineries as strategic industrial infrastructure rather than treating them solely as downstream petroleum businesses.
They argued that every barrel processed domestically has the potential to retain economic value within Nigeria that would otherwise leave the country through imports.
Beyond fuel supply, the association said a stronger refining industry could support employment and activity across engineering services, fabrication, transportation, petrochemicals, lubricants, plastics and construction materials while helping conserve foreign exchange.
CORAN also called for the development of a network of large, medium-sized and modular refineries located strategically around crude-producing regions and major consumption centres.
It argued that the successful operation of one or more large refineries should not be regarded as the end of Nigeria’s refining ambitions, but as part of a wider refining ecosystem.
To coordinate the proposed interventions, the association called for an urgent Presidential Refining Industry Roundtable involving CORAN, NUPRC, NMDPRA, NNPC Limited, crude producers, financial institutions, infrastructure investors and relevant government ministries.
The group outlined 10 priority actions, including the full institutionalisation of the naira-for-crude arrangement, development of a domestic crude pricing template and stronger enforcement of the Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act.
It also proposed increased use of crude swaps, a refinery-development financing framework, shared petroleum-product infrastructure and strategic petroleum-product reserves.
The refiners further sought regulatory and fiscal incentives for refinery expansion, particularly for investments in conversion units that could increase domestic production of Premium Motor Spirit, Automotive Gas Oil, aviation fuel and liquefied petroleum gas.
The association said government policy should progressively shift from supporting consumption to enabling domestic production.
It also pointed to the recent intervention by United States President Donald Trump in the American refining sector as an example of strategic government support, arguing that Nigeria has an even stronger case for intervention given the challenges facing local operators.
The association identified foreign-exchange pressures, high borrowing costs, limited access to long-tenor financing, crude supply difficulties, inadequate infrastructure and high logistics costs among the constraints confronting Nigerian refiners.
It argued that government support for refining amounts not only to industrial policy but also to energy security and broader economic policy.
Ultimately, CORAN said Nigeria should move towards a position where its crude increasingly feeds domestic refineries, local refineries supply the domestic market and surplus production supports exports to other African markets.
The association said achieving that objective would require coordinated support for refineries, pipelines, storage facilities, access to commercially priced Nigerian crude and long-term industrial financing.