The Federal Government and the Crude Oil Refinery Owners Association of Nigeria (CORAN) are working towards creating a more dependable system for supplying crude oil to domestic refineries as Nigeria intensifies efforts to reduce dependence on imported petroleum products.
The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, said Nigeria’s Domestic Crude Supply Obligation (DCSO) must evolve beyond an administrative arrangement into a transparent and commercially sustainable framework.
Lokpobiri made the remarks during the Nigeria Oil Refining Summit 2026 in Lagos, where industry stakeholders discussed challenges affecting the country’s refining sector.
Represented by his Technical Adviser, Mr Umar Gwandu, the minister said crude supply arrangements must provide certainty for both oil producers and refinery operators.
According to him, the government’s Naira-for-Crude initiative was designed to encourage local crude transactions using the domestic currency while reducing pressure on foreign exchange requirements.
He explained that the policy seeks to improve access to crude feedstock for Nigerian refineries while maintaining fair commercial returns for oil producers.
“The challenge is about achieving alignment between upstream producers and domestic refiners,” the minister said.
He added that government’s responsibility was to create a predictable regulatory environment that would encourage investment across the petroleum value chain.
CORAN Raises Concern Over Crude Availability
The Chairman of CORAN, Mr Momoh Oyarekhua, said several Nigerian refineries continue to face difficulties securing crude oil under commercially viable conditions despite the country’s significant petroleum reserves.
He warned that inconsistent crude availability could affect refinery operations and delay efforts to reduce dependence on imported refined products.
Oyarekhua called for stronger implementation of the Domestic Crude Supply Obligation established under Section 109 of the Petroleum Industry Act (PIA).
He said qualifying refineries, including modular plants, should have access to structured crude supply arrangements that allow them to operate efficiently.
The refinery owners’ association also proposed a transparent domestic crude pricing system that considers: crude quality, delivery location, transportation costs, evacuation expenses.
According to CORAN, local supply arrangements should recognise the economic advantage of supplying crude directly to Nigerian refineries rather than exporting crude and importing refined products.
Push for Naira-for-Crude Expansion
CORAN urged the full implementation of the Naira-for-Crude mechanism to support domestic refining.
The association also recommended alternative supply strategies, including: crude swaps, regional supply agreements, direct supply from nearby producing assets.
Oyarekhua said reducing unnecessary movement of crude through export terminals could lower costs and improve refinery competitiveness.
He also stressed the need for greater investment in petroleum infrastructure, including: pipelines, storage facilities, depots, marine terminals.
“Support the refinery, support the pipeline, support storage terminals,” he said.
Nigeria’s Refining Challenge
Nigeria has Africa’s largest crude oil reserves but has historically relied heavily on imported refined petroleum products because of limited domestic refining capacity.
For decades, the country’s major refineries in: Port Harcourt, Warri, Kaduna.
operated below capacity because of ageing infrastructure, maintenance problems, and operational challenges.
The emergence of new private refining capacity, particularly the Dangote Refinery in Lagos, has renewed government efforts to create a stronger domestic petroleum supply chain.
Industry experts argue that reliable crude availability is essential if Nigeria wants refineries to operate consistently and compete internationally.
