Owners of private refineries in Nigeria have called on the Federal Government to take urgent steps to strengthen domestic refining and reduce the country’s dependence on imported petroleum products.

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.”

The association said Nigeria could gain significantly from a stronger domestic refining industry but warned that local operators were still facing several challenges capable of slowing investment and production.

Among the difficulties identified by CORAN are foreign exchange pressures, high borrowing costs, limited access to long-term financing, crude supply problems, inadequate infrastructure and expensive logistics.

The association argued that government intervention was necessary to protect the investments already made in the refining sector and encourage further development.

CORAN also raised concerns about the difficulty domestic refineries have experienced in obtaining crude oil on commercially sustainable terms despite Nigeria’s position as one of Africa’s major crude oil producers.

According to the association, 61.9 million barrels were allocated to domestic refineries during the first quarter of 2026, while producers offered 68.7 million barrels. However, only 28.5 million barrels were actually delivered.

It attributed the gap partly to differences between the prices demanded by crude producers and what domestic refiners could commercially sustain.

The association, however, acknowledged an improvement in the second quarter, when 53.7 million barrels of crude oil and condensate were reportedly supplied to local refineries, representing a Domestic Crude Supply Obligation performance of 97.4 per cent.

CORAN stressed that crude allocation on paper would not solve the problem unless the crude was actually delivered under terms that allowed refineries to operate profitably.

The refinery owners therefore proposed a domestic crude pricing framework that would take into account international crude benchmarks, crude quality, transportation costs, the point of delivery, logistics, proximity to producing fields and reasonable commercial margins.

They argued that the objective should not be to subsidise crude for refiners but to ensure that Nigerian crude supplied to Nigerian refineries is priced fairly and competitively.

CORAN also expressed concern over the return of petroleum-product imports, warning that excessive dependence on imported fuel could weaken incentives for domestic refinery investment.

The association cited data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority showing that domestic Premium Motor Spirit supply dropped from about 32.5 million litres per day in June 2026 to 25.8 million litres per day in July.

During the same period, petrol imports reportedly increased from approximately 18.1 million litres per day to 19.7 million litres per day.

While CORAN said Nigeria must maintain adequate fuel stocks and avoid policies that could trigger shortages, it urged the government to ensure that imports increasingly serve only as a backup for genuine supply gaps.

The association warned that allowing imports to continue at high levels while domestic refineries receive major investments could discourage investors, increase pressure on foreign exchange and cause Nigeria to lose refining-related jobs and economic value abroad.

It therefore called for import licences to be increasingly linked to independently verified domestic supply gaps, with locally produced petroleum products receiving priority where they meet the required specifications and commercial conditions.

Beyond crude supply, CORAN identified access to finance as one of the biggest obstacles facing the emerging refining industry.

The association noted that refineries require substantial investments in processing equipment, storage facilities, pipelines, loading infrastructure, laboratories, environmental systems, fire protection and working capital.

It urged the Federal Government to treat refineries as strategic industrial infrastructure rather than merely downstream petroleum businesses.

According to CORAN, increased domestic refining would create jobs and stimulate other sectors, including engineering, transportation, fabrication, petrochemicals, construction and logistics, while also helping to conserve foreign exchange.

The association further proposed the development of a network of large, medium-sized and modular refineries located strategically around crude-producing areas and major consumption centres.

It called for an urgent Presidential Refining Industry Roundtable involving refinery owners, NUPRC, NMDPRA, NNPC Limited, crude producers, financial institutions, infrastructure investors and relevant government ministries.

Among its recommendations are the institutionalisation of naira-for-crude transactions, stronger enforcement of the Domestic Crude Supply Obligation, the development of a domestic crude pricing template, increased use of crude swaps and a gradual reduction in petroleum-product imports.

CORAN also proposed a refinery development financing framework, shared petroleum-product infrastructure, strategic fuel reserves and regulatory and fiscal incentives for refinery expansion.

The association said supporting domestic refining would help Nigeria move beyond exporting crude oil and importing refined petroleum products, while positioning the country to eventually become a major refining hub for Africa.

The refinery owners consequently urged the Federal Government to focus more on enabling domestic production and building the infrastructure required to make Nigerian refineries competitive and sustainable.