LAGOS, Nigeria — The Crude Oil Refinery Owners Association of Nigeria (CORAN) has urged the Federal Government to progressively phase out petroleum product imports and fully implement the Naira-for-Crude policy to strengthen local refineries and position Nigeria as Africa’s refining hub.
CORAN President, Momoh Oyarekhua, made the call in his welcome address at the 3rd Nigeria Oil Refining Summit held in Lagos on Monday, reports Daily Independent.
Oyarekhua also called for a fresh domestic crude pricing template that takes into account crude quality, delivery points, avoided international logistics costs and actual domestic evacuation expenses to make crude supply to local refineries commercially viable.
He further demanded stronger enforcement of the Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act, while urging the government to preserve commercially workable arrangements between crude producers and refinery operators.
According to him, crude swaps and proximity-based supply arrangements should also be encouraged to enable crude-producing assets located close to domestic refineries to supply them directly, rather than transporting crude through distant export infrastructure.
Oyarekhua said the government should establish a Refinery Development Financing Framework providing long-term financing, guarantees and refinancing mechanisms for new refinery projects and expansion of existing capacity.
He said the financing framework should be complemented by investment in shared petroleum-product infrastructure, including pipelines, depots, storage terminals, jetties, rail evacuation systems and other common-carrier facilities to reduce costs and improve distribution.
The CORAN president also advocated the creation of strategic petroleum-product reserves capable of cushioning temporary refinery shutdowns, maintenance periods and disruptions in international supplies.
He called for regulatory and fiscal incentives to support refinery expansion, particularly investments in conversion units capable of increasing domestic production of Premium Motor Spirit, aviation fuel, cooking gas and other essential petroleum products.
Oyarekhua also urged the government to develop a clear domestic refining roadmap with measurable targets for refining capacity, domestic market share, petroleum-product imports and eventual export capacity.
He said Nigeria should move away from a model in which the country exports crude oil and imports refined products at significant economic cost.
“Our crude must increasingly power our refineries, our refineries must increasingly supply our market, and the country must ultimately become a refining hub for Africa,” he said.
Oyarekhua stressed that achieving the objective would require stronger collaboration among crude producers, regulators, refiners, marketers, financiers, host communities and the media.
He acknowledged the progress recorded in domestic refining, saying the increasing contribution of local refineries to Nigeria’s fuel supply demonstrated what could be achieved when investment, government policy and industry cooperation were aligned.
Also speaking, Chairman of the Independent Petroleum Producers Group (IPPG), Adegbite Falade, said Nigeria could reliably supply domestic refineries with crude if the country increased production, protected evacuation infrastructure, matched crude grades with refinery configurations and established a competitive and transparent domestic crude market.
Falade said the feedstock required to sustain Nigeria’s growing refining capacity would increasingly have to come from domestic oil fields and terminals.
He identified increased crude production, protection and modernisation of evacuation infrastructure, and improved security as priorities for sustaining the refining sector.
“Nigeria cannot refine barrels that are not produced. The answer to rising domestic refining demand is not merely to redistribute a limited pool of crude. The answer is to create more barrels,” he said.
Falade added that while efforts to curb crude theft and pipeline sabotage had recorded progress, the country needed dedicated crude evacuation corridors, secure pipelines, adequate terminal capacity, sufficient storage, functional jetties and efficient marine logistics.
