- Local refinery companies have demonstrated true faith in Nigeria’s downstream sector by committing billions of dollars to fixed refining assets, taking on significant risks such as construction, crude supply, FX volatility, and regulatory uncertainty—investments that cannot be easily exited or relocated.
- By contrast, decades of import dependence under the subsidy regime generated massive profits for importers without translating into domestic refining capacity, with capital largely diverted to real estate, financial portfolios, and short-cycle ventures rather than industrial infrastructure.
- CORAN advocates intentional policy support for local refiners through guaranteed crude supply, conditional import licensing, FX and pricing alignment, and clear differentiation between refiners and importers—arguing that faith in the sector should be rewarded to build energy security, industrial depth, and economic sovereignty for Nigeria.
Nigeria’s downstream petroleum sector is undergoing a long-overdue reckoning.
After decades of heavy dependence on imported petroleum products, subsidy distortions, and massive capital leakage, the country is finally witnessing the emergence of local refinery companies that have chosen to invest, build, and operate refining assets on Nigerian soil.
This development raises an important national question: Who has truly demonstrated faith in Nigeria’s downstream sector—local refinery companies or petroleum importers?
“The answer is not ideological. It is grounded in evidence, capital behaviour, and long-term commitment.”
Faith Is Measured by Capital at Risk
Local refinery companies—spanning large-scale, mid-scale, and modular refineries—have demonstrated belief in Nigeria’s downstream sector by committing capital to fixed industrial assets located within the country. Refining is one of the most capital-intensive and risk-exposed segments of the petroleum value chain. Investors must contend with:
- Construction and commissioning risk
- Crude oil supply uncertainty
- Foreign exchange volatility
- Power, logistics, and evacuation constraints
- Regulatory and policy inconsistency
Once a refinery is built, capital is effectively locked in. The asset cannot be relocated, flipped, or exited without substantial loss. Refining requires daily operational discipline, strict product specification compliance, environmental responsibility, community engagement, and sustained market participation.
A refinery, therefore, is not a trading strategy. It is an industrial declaration of confidence in Nigeria’s future.
Collectively, local refinery companies have committed tens of billions of dollars to downstream infrastructure that only delivers value if Nigeria succeeds as a refining and industrial economy. That is what true faith looks like.
The Importer Era: Profits without Production
By contrast, Nigeria’s downstream sector for much of the last three decades was dominated by an import-dependent trading model. During the subsidy era in particular, petroleum importation became an extraordinarily lucrative business, driven by:
- Price arbitrage
- FX advantages
- Weak consumption verification
- Subsidy reimbursement mechanisms
The outcomes of this model are well documented. Investigations during the subsidy period revealed that Nigeria routinely paid for volumes of petrol far in excess of realistic domestic consumption, costing the country billions of dollars over a short period. Yet despite the scale of wealth generated during this era, refining capacity did not materialize.
What the Data Shows
Even after subsidy removal, Nigeria’s structural dependence on imports remains evident in official data. According to the National Bureau of Statistics (NBS), Nigeria imported over 20 billion liters of Premium Motor Spirit (PMS) in 2023, only marginally lower than 2022 levels. This underscores how deeply entrenched import reliance had become.
More striking is the cost implication. NBS trade data reported by Reuters shows that petrol imports rose to approximately N15.4 trillion in 2024, more than doubling from about N7.5 trillion in 2023. This represents massive foreign exchange outflows—resources that could otherwise have circulated within the domestic economy through refining, logistics, storage, petrochemicals, and industrial employment.
The data exposes a hard truth: importation consumed national wealth but did not build national capacity.
Where Did the Importer Fortunes Go?
If petroleum importation truly reflected belief in Nigeria’s downstream, one would expect significant reinvestment into refining, storage, and processing infrastructure. That did not occur. Instead, capital accumulated during the importer-dominated era largely flowed into:
- Real estate and non-productive assets
- Financial portfolios
- Upstream acquisitions, including marginal fields—often with crude subsequently sold to international traders rather than refined locally
This capital allocation pattern reveals confidence in short-cycle returns, not in long-term downstream industrialization.
Two Models, Two Belief Systems
Nigeria is now confronting the consequences of two competing downstream philosophies:
- Local refinery companies believe in domestic value addition, energy security, technical capacity, and long-term economic resilience.
- Import-reliant operators believe primarily in continued access to ports, FX windows, and permissive import regimes.
This divergence becomes most visible whenever reform is proposed. Local refiners advocate for:
- Reliable and transparent crude supply
- Pricing and FX coherence
- Conditional import controls where domestic supply exists
Importers, on the other hand, consistently push for unrestricted import access—even in situations where local refining capacity is available. From a national development standpoint, these positions are not equivalent.
CORAN’s Position: Faith Must Be Rewarded
As the umbrella body representing Nigeria’s refining industry, the Crude Oil Refinery-owners Association of Nigeria (CORAN) maintains that Nigeria has reached a point where policy neutrality is no longer sufficient. Downstream development requires policy intentionality.
Accordingly, CORAN advocates the following:
- Guaranteed and transparent crude supply to domestic refineries
- Allocation mechanisms must be rule-based, enforceable, and insulated from discretion.
- Conditional import licensing
- Imports should function strictly as a balancing mechanism—not a default option—where domestic refining can meet demand at specification.
- FX and pricing alignment
- Local refiners should not be structurally disadvantaged relative to importers who externalise industrial risk.
- Clear policy differentiation
- Companies that refine and process locally should not be treated the same as those whose activity is limited to importation.
These measures are not protectionist. They are standard industrial policy tools deployed by serious energy-producing economies.
A National Choice, not a Corporate Rivalry
This debate is not about favoring one company over another. It is about deciding what kind of downstream sector Nigeria wants. A country that imports what it can refine remains vulnerable to:
- FX shocks
- Supply disruptions
- Fiscal instability
A country that supports its local refinery companies builds:
- Energy security
- Skilled employment
- Industrial depth
- Economic sovereignty
Conclusion: Faith Is What You Risk
Local refinery companies have already answered the faith question—not with press statements, but with steel, concrete, distillation units, and capital locked into Nigeria. The importer model, historically, answered with cargoes and margins.
Nigeria must now decide which belief system its policies will support. Because in the downstream sector, faith is not what you claim— it is what you build, and what you are willing to risk for the nation.
