CORAN calls for reforms of naira for crude sales to local refineries

The Crude Oil Refinery-Owners Association of Nigeria (CORAN) has called for reforms to make it easier for local refineries to access crude oil at commercially viable prices, saying Nigeria cannot get the full benefit of its growing refining capacity if refineries continue to struggle to secure feedstock.

Chairman of CORAN and host of the 3rd Nigeria Oil Refining Summit, Momoh Jimah Oyarekhua, made the call in his keynote address at the summit.

Oyarekhua said Nigeria had made progress in domestic refining, with local refineries increasingly changing the country’s fuel supply situation.

However, he said some domestic refineries were still finding it difficult to get crude at prices and under conditions that make commercial sense, while petroleum product imports continued and some local refining capacity remained unused.

He said the priority now should be to properly connect Nigeria’s crude production with its domestic refineries.

To achieve this, Oyarekhua called for the full implementation of the Naira-for-Crude arrangement, including access for qualified modular refineries.

He also called for a domestic crude pricing system that would consider the quality of the crude, where it is being delivered and the cost saved by not transporting the crude through international export routes.

The CORAN chairman further urged stronger enforcement of the Domestic Crude Supply Obligation contained in Section 109 of the Petroleum Industry Act, while allowing producers and refiners to maintain workable commercial agreements.

He proposed crude swaps and arrangements that would allow refineries to source crude from nearby oil-producing assets instead of moving the crude through distant export facilities before bringing it back to domestic refineries.

Oyarekhua also called for a gradual reduction in petroleum product imports, saying imports should increasingly be limited to genuine gaps in domestic supply and the need to maintain strategic reserves.

He said Nigeria also needed long-term financing, guarantees and refinancing options to support the construction of new refineries and expansion of existing ones.

Beyond crude supply and financing, he called for investment in shared infrastructure such as pipelines, storage facilities, depots, terminals, jetties and rail systems to make it easier to move crude and refined products across the country.

Oyarekhua said Nigeria should also establish strategic reserves of petroleum products to provide a buffer when refineries shut down temporarily for maintenance or when international supply is disrupted.

He said refining crude in Nigeria was about more than producing petrol and other fuels, as it would also help the country retain foreign exchange, create jobs, build local expertise and support manufacturing and petrochemical industries.

“Our crude must increasingly power our refineries. Our refineries must increasingly supply our market. And Nigeria must ultimately become a refining hub for Africa,” he said.

Oyarekhua urged stakeholders to use the two-day summit to move beyond speeches and agree on practical solutions that would bring Nigerian crude closer to Nigerian refineries and ensure local refineries better meet the needs of the Nigerian market.