Coran calls for urgent presidential intervention to strengthen Nigeria’s domestic refining industry

The Crude Oil Refinery Owners Association of Nigeria (CORAN) has urged the Federal Government to urgently convene a Presidential Refining Industry Roundtable to tackle challenges confronting Nigeria’s domestic refining industry and create a predictable, investment-friendly environment for refinery development.

CORAN made the call in a position paper following recent developments in the United States, where President Donald Trump met with leading refinery and fuel-distribution executives at the White House on September 1, 2026, to discuss measures to increase domestic refining output and reduce fuel prices.

The association said the development offered an important lesson for Nigeria, noting that U.S. refineries were operating at approximately 98 per cent utilisation, processing about 17.5 million barrels of crude oil daily.

It said despite the high level of refining activity, the U.S. government still considered it necessary to engage refinery operators after gasoline prices exceeded $4 per gallon and inventories began tightening.

According to CORAN, government engagement with refinery owners should not be viewed as a corporate entitlement but as a sound industrial, energy-security and economic policy.

The association said Nigeria faces even more difficult structural challenges, including foreign-exchange pressures, high borrowing costs, limited access to long-term financing, crude-feedstock constraints, inadequate infrastructure and high logistics costs.

CORAN expressed concern that Nigeria, despite being one of Africa’s largest crude oil producers, still struggles to supply domestic refineries with Nigerian crude on commercially workable terms.

It noted that while crude supply to local refineries improved significantly in the second quarter of 2026, physical allocation alone was not enough.

The association said crude must be delivered at commercially sustainable prices and under arrangements that adequately consider transportation, quality, evacuation, financing and proximity to producing assets.

CORAN also reaffirmed its support for the Federal Government’s Naira-for-Crude initiative, urging that it be fully institutionalised and made predictable for qualified domestic refineries, including modular and emerging operators.

The association argued that refineries whose products are sold largely in naira should not face unnecessary foreign-exchange pressure when sourcing crude.

It therefore called for a transparent mechanism that would enable eligible domestic refineries to access Nigerian crude and settle qualifying transactions in naira under commercially workable conditions.

On crude pricing, CORAN called for a commercially sensible domestic pricing framework that reflects the actual circumstances of transactions between producers and domestic refiners.

It said international benchmarks such as Brent, WTI and Platts remain useful references but should not be applied mechanically where domestic refiners are also required to bear additional transportation, trucking, barging or pipeline costs.

The association proposed that domestic crude pricing should take into account crude quality, point of delivery, avoided international freight and insurance costs, domestic evacuation expenses, proximity between producing fields and refineries, as well as reasonable commercial margins for producers.

CORAN further urged the government to address the resurgence of petroleum-product imports.

While acknowledging that imports may be necessary to cover supply gaps and maintain adequate stocks, the association said imports should increasingly serve as a temporary supply-gap mechanism rather than remain the default structure of Nigeria’s downstream petroleum market.

It warned that excessive imports alongside domestic refining investments could weaken incentives for refinery development, increase foreign-exchange demand, export Nigerian jobs and refining margins, and expose the country to international freight and geopolitical disruptions.

The association identified access to financing as another major challenge confronting domestic refinery developers.

CORAN called for the creation of a Refinery Development and Expansion Financing Framework involving development-finance institutions, commercial banks, pension funds, infrastructure funds and private investors.

It said the framework could provide longer-term financing, credit guarantees, refinancing windows, construction-risk support and appropriately structured funding for new refineries and existing facilities seeking to expand their capacity.

The association also called for greater investment in pipelines, storage terminals, depots, rail-linked transportation, marine evacuation facilities and other shared infrastructure.

According to CORAN, transporting crude and finished petroleum products predominantly by road imposes unnecessary costs on refiners and consumers, contributes to road deterioration and increases transportation and accident risks.

CORAN said Nigeria must begin to regard refineries as strategic industrial infrastructure rather than simply downstream petroleum businesses.

It noted that domestic refining could support employment, engineering, fabrication, transportation, petrochemicals, lubricants, plastics, construction and other industries, while helping Nigeria conserve foreign exchange.

The association therefore advocated a refining ecosystem comprising large, medium-sized and modular refineries strategically located around crude-producing areas and major consumption centres.

CORAN called for an urgent Presidential Refining Industry Roundtable involving the association, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), NNPC Limited, crude producers, financial institutions, infrastructure investors and relevant government ministries.

It said the meeting should produce clear timelines for institutionalising Naira-for-Crude, establishing a domestic crude-pricing framework, strengthening the Domestic Crude Supply Obligation, promoting crude swaps, reducing unnecessary petroleum-product imports, providing long-term refinery financing, developing shared infrastructure, establishing strategic product reserves, supporting refinery expansion and creating a clear national refining roadmap.

CORAN said Nigeria must now move decisively from an import-dependent petroleum economy to a production-driven petroleum economy.

The association called on the government to support refinery development, pipelines, storage infrastructure, commercially priced Nigerian crude and long-term industrial finance, while allowing competition among domestic producers to deliver greater efficiency and sustainable prices.

It stressed that Nigeria could not continue exporting crude and jobs while importing petroleum products at significant economic cost.

CORAN said the ultimate objective should be for Nigerian crude to increasingly power Nigerian refineries, Nigerian refineries to increasingly supply the domestic market, and Nigeria to ultimately become a refining hub for Africa.