Follow Us on Google Discover
The Crude Oil Refinery Owners Association of Nigeria (CORAN) has followed with considerable interest recent developments in the United States petroleum refining sector, particularly the meeting convened by President Donald Trump with leading American refinery and fuel-distribution executives at the White House on Tuesday, September 1, 2026.
The meeting provides an important policy lesson for Nigeria.
President Trump convened approximately a dozen executives from major and independent refining companies, including representatives of Marathon Petroleum, Valero Energy, PBF Energy and Delek US, among others, to discuss measures capable of increasing domestic refining output and ultimately reducing gasoline and diesel prices for American consumers. The meeting was also attended by senior administration officials, including the United States Secretary of Energy and the head of the National Energy Dominance Council.
Discussions reportedly covered refinery capacity, regulatory requirements, accelerated permitting, investment conditions, biofuel obligations and improved access to suitable crude feedstock. The administration also explored how American refiners could process additional Venezuelan crude and what policy or regulatory adjustments might facilitate increased domestic fuel production.
Also Read
The significance of this intervention cannot be overstated.
At the time President Trump summoned refinery operators to the White House, American refineries were not idle. U.S. refinery utilisation had risen to approximately 98 per cent, its highest level since August 2018. Refiners were processing about 17.5 million barrels of crude oil per day. Yet, with gasoline prices exceeding $4 per gallon and domestic inventories tightening, the American government did not dismiss the concerns of refinery owners as corporate entitlement. It engaged them directly in search of policy solutions.
CORAN therefore submits that there is an important lesson here for Nigeria.
The Nigerian refining industry operates under substantially more difficult structural conditions than its American counterpart. Nigerian refinery developers must contend with foreign-exchange pressures, high borrowing costs, limited access to long-tenor project financing, crude-feedstock commercial challenges, infrastructure deficiencies and significant logistical costs.
If a country whose refineries are operating close to maximum capacity can still bring refinery owners to the highest level of government to discuss measures for reducing the cost of petroleum products, then supporting domestic refining in Nigeria cannot reasonably be described as entitlement.
It is sound industrial policy. It is energy-security policy. And ultimately, it is economic policy.
THE NIGERIAN PARADOX
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 should concern every policymaker.
During the first quarter of 2026, 61.9 million barrels were allocated to domestic refineries and producers offered 68.7 million barrels. Actual deliveries, however, amounted to only 28.5 million barrels. Importantly, 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. 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.
However, physical allocation alone does not resolve the problem. A refinery does not consume an allocation on paper. It consumes crude delivered under commercially sustainable terms.
Pricing, transportation, evacuation infrastructure, crude quality, financing, payment arrangements and proximity to producing assets remain fundamental components of the crude-supply equation.
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.
NIGERIA MUST STAY TRUE TO THE NAIRA-FOR-CRUDE POLICY
CORAN strongly reiterates its support for the principle behind the Federal Government’s Naira-for-Crude policy.
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.
Nigeria therefore 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.
CRUDE PRICING MUST REFLECT THE REAL COMMERCIAL TRANSACTION
CORAN also urges the government and regulators to urgently establish a commercially sensible pricing template for crude supplied to domestic refineries.
International benchmarks such as Brent, WTI and Platts are useful market references. They should not, however, be applied mechanically in circumstances where doing so effectively causes Nigerian refiners to pay for logistics they themselves must separately undertake.
Many modular refineries obtain crude from producing assets and arrange evacuation from or near the wellhead.
Where an international benchmark incorporates freight, insurance or delivery economics associated with another market, charging the domestic refinery the full benchmark while simultaneously requiring it to bear its own evacuation, trucking, barging or pipeline cost risks creating an economically distorted transaction.
Recent discussions involving Nigerian regulators and refinery stakeholders have focused specifically on crude pricing and logistical adjustments for refiners located close to producing assets.
CORAN proposes a transparent Domestic Refinery Crude Pricing Framework incorporating internationally recognised crude benchmark values; quality differentials; actual point of delivery; avoided international freight and insurance costs; domestic evacuation and logistics costs; proximity between the producing field and receiving refinery; and reasonable commercial margins for producers.
The objective is not subsidised crude. The objective is correctly priced crude.
NIGERIA MUST RECONSIDER UNRESTRAINED PETROLEUM PRODUCT IMPORTATION
The resurgence of petroleum product imports should also receive urgent government attention.
NMDPRA data for July 2026 showed domestic PMS supply falling from approximately 32.5 million litres per day in June to 25.8 million litres per day in July, while petrol imports increased from about 18.1 million litres to 19.7 million litres per day.
Nigeria certainly requires adequate petroleum-product stocks, and CORAN is not advocating policies capable of creating artificial shortages.
However, importation must increasingly serve as a supply-gap mechanism, not the default commercial architecture of the downstream petroleum sector.
A continuous import regime existing alongside substantial domestic refining investment exports Nigerian jobs and refining margins, places additional demand on foreign exchange, weakens investment incentives for existing and prospective refineries, exposes Nigeria to international freight disruptions and geopolitical shocks, and ultimately undermines the country’s aspiration to become a petroleum-product refining and export hub.
International petroleum-market disruptions have demonstrated why domestic refining capacity should be regarded as part of Nigeria’s national energy-security infrastructure.
Import licences should increasingly be calibrated against independently verified domestic production and supply gaps. Domestic production capable of meeting equivalent specifications and commercial requirements should receive priority within the Nigerian market.
ADDRESS THE FINANCING AND LIQUIDITY CRISIS
Perhaps the greatest unspoken constraint confronting Nigeria’s emerging refining industry is finance.
Refineries are extremely capital-intensive assets. Even relatively small modular refineries require substantial expenditure on process units, storage facilities, utilities, pipelines, loading facilities, environmental infrastructure, laboratories, fire-protection systems and working capital.
Yet refinery developers in Nigeria often confront short-tenor commercial loans, high domestic interest rates and limited availability of specialised energy-infrastructure financing.
A refinery project cannot reasonably be financed on the same commercial structure as ordinary short-term trading.
Government intervention does not necessarily mean writing cheques to private refinery owners. Intervention can take the form of creating the conditions in which long-term capital becomes available.
CORAN therefore recommends the establishment of a Refinery Development and Expansion Financing Framework, working through appropriate development-finance institutions, commercial banks, pension funds, infrastructure funds and private capital.
The framework could provide credit guarantees, refinancing windows, longer-tenor debt, construction-risk support and appropriately structured intervention funding for qualifying refinery projects.
Existing refineries seeking to add additional processing units should also qualify. This is particularly important because upgrading refinery configurations through reforming, cracking, desulphurisation and other conversion units can substantially increase Nigeria’s production of higher-value petroleum products without requiring every investor to construct an entirely new refinery.
STORAGE AND DISTRIBUTION INFRASTRUCTURE MUST BECOME A NATIONAL PRIORITY
Producing petroleum products is only half of the equation. Nigeria must also be able to move those products efficiently from refineries to consumers.
Many domestic refiners currently bear significant costs moving crude into their facilities and subsequently moving finished products out by road. That is economically inefficient.
It accelerates deterioration of Nigerian roads, increases transportation costs, increases accident risks and ultimately adds to the pump price paid by consumers.
Government should therefore urgently develop an integrated petroleum-product logistics programme incorporating strategic pipelines; coastal and inland depots; shared storage terminals; rail-linked product transportation; marine evacuation infrastructure; and open-access infrastructure capable of serving multiple refinery operators.
Private investors can build and operate much of this infrastructure. Government’s principal responsibility is to create the regulatory framework, rights of way, financing environment and investment security necessary to make those projects viable.
LOCAL REFINING MUST BECOME A NATIONAL INDUSTRIAL POLICY
Nigeria should stop regarding refineries merely as downstream petroleum businesses. They are industrial infrastructure.
Every barrel refined within Nigeria has the potential to retain economic value that would otherwise leave the country.
Domestic refining supports employment, engineering services, fabrication, transportation, petrochemicals, lubricants, plastics, construction materials and numerous associated industries. It also preserves foreign exchange.
This makes refinery development directly connected to Nigeria’s broader industrialisation strategy.
The objective should therefore be to build a network of large, medium-sized and modular refineries strategically distributed around producing basins and major consumption centres.
The success of one refinery should not mark the completion of Nigeria’s refining ambition. Nigeria requires an ecosystem.
THE LESSON FROM THE UNITED STATES
CORAN does not suggest that the American and Nigerian petroleum markets are identical. They are not. But the principle illustrated by the September 1 White House meeting is important.
The United States has highly developed petroleum infrastructure, sophisticated commodity markets, deep capital markets and mature refining companies.
Its refineries were operating at approximately 98 per cent utilisation when its President nevertheless personally engaged industry executives to ask what government could do to facilitate additional refining capacity and lower consumer fuel prices.
American refiners used the opportunity to raise concerns about regulations, permitting requirements, biofuel mandates and crude supply arrangements. Their government listened.
That engagement is not evidence of entitlement. It is evidence that petroleum refining is considered strategically important to national economic security.
Nigeria should apply the same philosophy to its own circumstances. Indeed, the case for intervention is arguably stronger here because Nigerian refiners face challenges that are either absent or substantially less severe in the United States: constrained access to long-term finance, high interest rates, foreign-exchange exposure, inadequate pipelines, insufficient shared storage infrastructure, high trucking costs and unresolved domestic crude commercial arrangements.
CORAN’S PROPOSED POLICY ACTIONS
CORAN therefore respectfully calls on the Federal Government to convene an urgent Presidential Refining Industry Roundtable involving CORAN, NMDPRA, NUPRC, NNPC Limited, crude producers, financial institutions, infrastructure investors and relevant government ministries.
The Roundtable should establish measurable timelines for the following actions:
1. Full institutionalisation of Naira-for-Crude, with transparent eligibility and access for qualifying domestic refineries, including modular refineries.
2. A domestic crude pricing template recognising crude quality, delivery point, avoided international logistics costs and actual domestic evacuation expenses.
3. Strengthened enforcement of the Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act while preserving workable commercial arrangements between producers and refiners.
4. Crude swaps and proximity-based supply arrangements that allow crude-producing assets located close to domestic refineries to supply those facilities without unnecessary transportation through distant export infrastructure.
5. Progressive reduction of petroleum-product imports, with imports increasingly restricted to objectively determined domestic supply shortfalls and strategic-stock requirements.
6. Creation of a Refinery Development Financing Framework providing long-tenor financing, guarantees and refinancing mechanisms for new refinery construction and capacity expansion.
7. Development of shared petroleum-product infrastructure, particularly pipelines, depots, storage terminals, jetties, rail evacuation and other common-carrier facilities.
8. Establishment of strategic petroleum-product reserves capable of cushioning temporary refinery shutdowns, maintenance periods and international supply disruptions.
9. Regulatory and fiscal incentives for refinery expansion, particularly investment in conversion units capable of increasing domestic production of PMS, AGO, aviation fuel, LPG and other essential products.
10. A clear domestic refining roadmap establishing national targets for refining capacity, domestic market share, petroleum-product imports and eventual export capacity.
CONCLUSION: PRODUCTION MUST REPLACE IMPORT DEPENDENCE
Nigeria has already taken the difficult decision to reform the petroleum-products market. The next stage must be equally bold.
The country must move decisively from an import-dependent petroleum economy to a production-driven petroleum economy.
Government intervention should therefore increasingly move away from subsidising consumption and toward enabling production.
Support the refinery. Support the pipeline. Support the storage terminal. Support access to commercially priced Nigerian crude. Support long-term industrial finance. And allow competition among Nigerian producers ultimately to deliver efficiency and sustainable prices to Nigerian consumers.
The most important lesson from Washington this week is simple: Even the world’s largest and most sophisticated petroleum economy understands that refining capacity is too strategically important to be left entirely to market forces when national energy security and the cost of living are at stake.
Nigeria, with its vast crude-oil resources, large domestic market and urgent need for foreign-exchange conservation, has even less reason to remain passive.
CORAN therefore calls on the Federal Government to seize this moment to establish a coherent, predictable and investment-friendly domestic refining policy.
Nigeria should not continue exporting crude, exporting jobs and importing the same petroleum products at considerable economic cost.
- Our crude must increasingly power our refineries.
Our refineries must increasingly supply our market.
And Nigeria must ultimately become a refining hub for Africa.
That should be the destination of petroleum-sector reform.
Crude Oil Refinery Owners Association of Nigeria (CORAN)
September 2026
