The Crude Oil Refinery Owners Association of Nigeria (CORAN) has urged the government and regulators to urgently establish a commercially sensible pricing template for crude supplied to domestic refineries.
The Association noted that Nigeria remains one of Africa’s largest crude-oil producers yet domestic refiners can still encounter significant difficulties obtaining Nigerian crude on commercially workable terms.
This contradiction according to the body should concern every policymaker. The demand is coming as some of the marketers blacklisted by Dangote refinery over import of petrol defended their position saying the Nigerian Downstream Petroleum Regulatory Authority (NMDPRA) issued them with import license contending that locally refined products was of short supply.
One of the marketers who spoke to our correspondent on condition of anonymity said the firm was approached by the regulator claiming that the import substitution has become imperative to sustain supply.
The marketer said it is still willing to import whenever the need arises.
CORAN in a position paper obtained by our correspondent recalled that during the first quarter of 2026, 61.9 million barrels were allocated to domestic refineries and producers offered 68.7 million barrels.
It further stated that actual deliveries, however, amounted to only 28.5 million barrels. The association added that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) identified pricing gaps between producers and domestic refiners as one of the principal reasons why crude offered did not ultimately translate into completed transactions.
“There has since been encouraging improvement” it noted adding that the NUPRC reported that 53.7 million barrels of crude oil and condensate were supplied to local refineries during the second quarter of 2026, representing reported DCSO performance of 97.4 per cent. CORAN acknowledges and commends this improvement.
CORAN further pointed out that physical allocation alone does not resolve the problem as a refinery does not consume an allocation on paper.
It consumes crude delivered under commercially sustainable terms, it stressed.
The association identified that pricing, transportation, evacuation infrastructure, crude quality, financing, payment arrangements and proximity to producing assets remain fundamental components of the crude-supply equation.
It said the NUPRC has acknowledged these realities and has begun consulting on mechanisms such as domestic crude swaps that could match producing assets more efficiently with nearby refiners and reduce unnecessary transportation costs. CORAN welcomes this direction and urges that it be accelerated.
CORAN further reiterated its support for the principle behind the Federal Government’s Naira-for-Crude initiative.
“The policy should not merely exist in name. It must become a predictable and institutionalised component of Nigeria’s domestic refining architecture.
A refinery whose principal product is sold in naira but which must repeatedly source crude through foreign-exchange-dependent arrangements suffers an avoidable currency mismatch.” It said.
The association insists that Nigeria needs a transparent mechanism through which qualified domestic refineries can access appropriate Nigerian crude and settle eligible domestic crude transactions in naira under clearly defined and commercially workable conditions.
“The framework must also be broad enough to accommodate modular and emerging refineries rather than inadvertently creating a system accessible only to the largest operators.
“Naira-for-Crude should become an industrialisation policy rather than an episodic intervention.” it added
Meanwhile some players in the downstream and midstream sector of Nigeria’s oil and gas industry are calling for empirical review of petrol consumption in Nigeria that will provide acceptable evaluation that summarizes and analyzes past research studies based on actual, measured data rather than what looks like theoretical arguments.
Their reactions following delisting of some marketers by Dangote Petroleum Refinery and Petrochemicals to restrict sales of Premium Motor Spirit (PMS) also called petrol to major marketers that continue to import petrol into Nigeria, amid concerns over product quality, market transparency and the integrity of products supplied under the Dangote brand.
Sources familiar with the refinery’s position said the immediate concern relates to the fact that some marketers are blending substandard imported PMS with products purchased from Dangote Refinery before distributing the blended product to the market. The refinery is concerned that such practices could make it difficult to distinguish between products supplied directly by the refinery and products subsequently blended or handled by third parties.
“It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery,” a source familiar with the refinery’s position said.
But reacting to the situation Dr. Gillis-Harry, the National President of the Petroleum Products Retail Owners Association of Nigeria (PETROAN), called for evidence based data to actually prove consumption figure, accurate domestic refining statistics and import substitution data.
Gillis-Harry, told LEADERSHIP that the market structure is continuously changing without proper direction and retailers and consumers of the product are increasingly concerned about supply chain management.
While, he supported and applauded Dangote refinery sustained efforts to ensure market efficiency and energy security, he also said Nigeria should not limit supply sources to a particular source.
“We understand the importance of promoting domestic production and protecting investment but again we should be guided not to run the risk of creating gap in the event of unforeseen conditions”, he said.
He said the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) should execute a comprehensive review of demand and supply statistics and local refining capacity with input of all stakeholders to completely erase further doubts and uncertainty governing the market.
The PETROAN chief, said while Dangote can be seen as providing leadership through growth performance and even providing buffer to international market a deepened sense of review would clear any doubt of in-country capacity and credibility of import argumentation.
Speaking in similar terms while responding to our correspondent inquest, Eche Idoko, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), said government should restrict the influence of portfolio marketers who go behind doors to create mood of lack of capacity to enable them embark on products imports.
Idoko, said Dangote has invested billions of dollars to develop and promote petroleum products refining and has patriotically supported Nigeria’s energy security supply but the efforts are being sabotaged.
The refinery has also raised concerns about the lack of a standard laboratory by the regulator and quality control infrastructure for imported petroleum products, particularly the capacity to independently verify and certify the specifications of products entering the Nigerian market.
The concerns come as Nigeria’s downstream petroleum sector undergoes a structural transition from longstanding import dependence towards greater domestic refining. With a capacity of 700,000 barrels per day, Dangote Petroleum Refinery has emerged as a major supplier of refined petroleum products to both the Nigerian and international markets, supplying products that meet internationally recognised quality specifications. The United States Energy Information Administration recently identified the Dangote refinery as a major factor behind the sharp increase in Nigeria’s seaborne petroleum product exports. Nigeria’s seaborne petroleum product shipments averaged 561,000 barrels per day in the second quarter of 2026, compared with an annual average of 79,000 barrels per day in 2023.
Dangote Petroleum Refinery’s jet fuel has emerged as a preferred choice in the global market, including across the US and Europe, where the Refinery has cemented its position as Europe’s largest external supplier of jet fuel for consecutive months, surpassing traditional exporters from the United States and the Middle East.
Meanwhile, the Centre for the Promotion of Private Enterprise [CPPE], has raised some fundamental issues about continuous indiscriminate importation of petroleum products to Nigeria saying the policy is killing domestic industries.
In a policy brief titled, “Rising Petroleum-product Imports and the future of domestic refining obtained by LEADERSHIP, the Chief Executive Officer, of the Center Dr. Muda Yusuf, explained that Petroleum-product imports should function as a transparent supply gap instrument not as a parallel market that displaces adequate domestic production.
Yusuf, is of the understanding that whereas local refiners can supply products of acceptable quality, quantity and competitive market price, indiscriminate import licensing weakens investment, jobs, foreign-exchange conservation, industrialisation and national energy security.
He stated that the Nigeria’s downstream petroleum market is at an important transition point and large-scale private refining has materially expanded domestic capacity and reduced the structural justification for petroleum-product import dependence.
Yusuf however observed that recent regulatory data show a sharp reversal whereby average Premium Motor Spirit (PMS) or also called petrol imports increased from 5.9 million litres per day in May 2026 to 18.1 million litres per day in June a 206.8 per cent increase and rose further to 19.7 million litres per day in July.
This shows that imports consequently supplied 43.3 per cent of July PMS receipts, compared with 12.4 per cent in May.
“The concern is not with imports required to close a genuine and independently verified shortfall. Imports remain a legitimate contingency tool for refinery outages, seasonal demand spikes, quality gaps and strategic-stock replenishment. The policy concern arises where import permits are issued without a transparent demonstration that domestic refiners cannot meet the relevant demand at acceptable standards and competitive market terms.” he noted.
This distinction he said is central to the Petroleum Industry Act (PIA) as Sections 317(8)–(9) contemplate petroleum-product import licensing in the context of a domestic supply shortfall while regulations discretion should therefore be exercised transparently, predictably and consistently with the country’s domestic-refining and industrialisation objectives.
He requested that the NMDPRA should publish a product-by-product supply-gap determination before approving material import volumes; give qualified domestic refiners a fair opportunity to meet verified demand; restrict import permits to the quantified residual gap and a defined validity period; and publish monthly permit, landing and domestic-evacuation data.
According to him, This is not a call for monopoly or blanket protection. It is a call for a systematic, rules-based regulation that makes competition fair, protects consumers and supports domestic productive capacity.
The import surge occurred alongside evidence of substantial domestic refining capability.
Dangote Refinery reported a test run above 700,000 barrels per day in June, while NMDPRA had reported domestic refineries operating at 99.12 per cent average capacity utilisation in April. Nigeria’s seaborne petroleum-product exports have also risen strongly, indicating that aggregate refining capability is no longer the binding constraint it once was.
Yusuf, pointed out that a deregulated market does not imply regulatory indifference to the structure of supply and as such the regulator must reconcile consumer protection and supply security with the PIA’s domestic-supply framework.
“Where domestic supply is genuinely adequate, import permits can suppress refinery offtake, weaken utilisation rates and transfer demand, income and employment abroad.
SOURCE: LEADERSHIP NEWS PAPER
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