Refinery Owners Seek FG’s Intervention, Push for Naira-for-Crude Framework

Want commercially viable crude supplies for local facilities Dangote refinery to sign IPO today in race for Africa’s largest listing Emmanuel Addeh in Abuja The Crude Oil Refinery Owners Association of Nigeria (CORAN) at the weekend called for urgent presidential intervention to address mounting structural constraints confronting domestic refiners, warning that Nigeria risks continuing to export its crude oil, jobs and refining margins while remaining dependent on imported petroleum products. The association, in a position paper, called for the immediate convening of a Presidential Refining Industry Roundtable, bringing together refiners, regulators, crude producers, the Nigerian National Petroleum Company Limited (NNPC), financial institutions, infrastructure investors and relevant government ministries to develop a clear roadmap for the sector. CORAN said the proposed intervention should focus on securing commercially viable crude supplies for local refineries, institutionalising the Naira-for-Crude initiative, establishing a domestic crude pricing framework, unlocking long-term financing and curbing what it described as unnecessary dependence on imported petroleum products. It argued that despite being one of Africa’s largest crude oil producers, Nigerian refiners still faced difficulties accessing feedstock under commercially workable arrangements. While acknowledging improved crude supplies to local refineries in the second quarter of 2026, the association maintained that physical allocation alone would not guarantee the survival and growth of domestic refining. According to CORAN, the real issue was whether crude could be supplied under arrangements that adequately reflected transportation costs, crude quality, delivery points, evacuation expenses, financing requirements and the proximity of refineries to producing assets. It said Nigerian refiners often faced additional costs associated with trucking, barging and pipeline transportation, which must be considered in determining commercially sustainable crude prices. CORAN therefore proposed a domestic crude pricing mechanism that would take into account crude quality, delivery location, avoided international freight and insurance costs, domestic evacuation expenses and reasonable commercial margins for producers. The refinery owners also renewed their push for the full institutionalisation of the Naira-for-Crude initiative, describing the policy as critical to reducing the foreign exchange exposure of domestic refiners whose products were largely sold in the local currency. “Naira-for-Crude should become an industrialisation policy rather than an episodic intervention,” CORAN stated. The association argued that requiring refineries to source crude in foreign currency while selling most of their products in naira created an unnecessary commercial mismatch that could undermine investments in the sector. It consequently called for a transparent and predictable framework through which qualified domestic refineries, including modular and emerging operators, could access Nigerian crude and settle eligible transactions in naira. CORAN also raised concerns about the continued influx of imported petroleum products, warning that excessive imports could weaken incentives for investment in domestic refining. Although it acknowledged that imports might be necessary to bridge genuine supply gaps and maintain adequate product availability, the association said they should increasingly serve as a temporary balancing mechanism rather than remain the foundation of Nigeria’s downstream petroleum market. According to CORAN, continued dependence on imported products would increase foreign exchange demand, expose Nigeria to international freight costs and geopolitical disruptions, while transferring jobs and refining margins outside the country. The association identified the high cost and limited availability of long-term financing as another major obstacle to the development of new refineries and the expansion of existing facilities. It therefore proposed the establishment of a Refinery Development and Expansion Financing Framework involving development finance institutions, commercial banks, pension funds, infrastructure funds and private investors. CORAN said the framework should provide longer-tenor funding, credit guarantees, refinancing windows and construction-risk support for refinery projects. The association further called for increased investment in pipelines, storage terminals, depots, rail-linked transportation and marine evacuation facilities, arguing that Nigeria’s overwhelming dependence on road transportation was increasing costs for refiners and consumers. It said moving crude and finished petroleum products predominantly by road was not only commercially inefficient but also contributed to road deterioration and heightened transportation and accident risks. CORAN urged the federal government to begin treating refining as strategic industrial infrastructure, rather than simply as another component of the downstream petroleum business. It noted that a stronger domestic refining industry could stimulate employment and investment across engineering, fabrication, transportation, petrochemicals, lubricants, plastics and construction, while helping the country conserve foreign exchange. The association said its call for presidential engagement was reinforced by recent developments in the United States, where President Donald Trump met refinery and fuel industry executives to discuss ways of expanding refining capacity and reducing fuel prices. CORAN argued that government engagement with refiners should not be interpreted as corporate entitlement, but as recognition of the strategic importance of refining to energy security and economic stability. It said the proposed Presidential Refining Industry Roundtable should produce measurable timelines for the full institutionalisation of Naira-for-Crude, the strengthening of the Domestic Crude Supply Obligation, the development of a domestic crude pricing template and the creation of sustainable financing mechanisms for refinery development. Other issues requiring urgent attention, it said, included promoting commercially viable crude swaps, developing shared infrastructure, supporting refinery expansion and establishing a national roadmap capable of positioning Nigeria as a major refining hub for Africa. CORAN maintained that with the right policy framework, Nigeria could build an integrated refining ecosystem comprising large, medium-sized and modular facilities located around crude-producing areas and major consumption centres. The association stressed that the country could no longer afford a petroleum value chain in which it exports its primary resource and imports the products derived from it at considerable economic cost. Meanwhile, the world’s largest single-train oil refinery, Dangote Petroleum Refinery is expected to sign its Initial Public Offer (IPO) today (Monday). THISDAY gathered last night that the signing ceremony will take place at 11am, at Eko Hotels, Lagos. The founder and Africa’s richest person, Aliko Dangote, is targeting a $50 billion valuation for the 650,000 barrels per day (bpd) refinery. The company plans to sell up to a 10 per cent stake, potentially raising around $5 billion in one of Nigeria’s biggest capital market deals. Since coming onstream a few years ago, the refinery has transformed Nigeria’s fuel supply chain by reducing dependence on imported petroleum products. The company had said that the projected valuation reflects the company’s internal expectations but declined to comment further on the timing or structure of the transaction. The Securities and Exchange Commission (SEC) had weekend approved the IPO of Dangote Petroleum Refinery and Petrochemicals FZE, with the company offering 4.1 billion ordinary shares at N525 each. The offer could raise approximately N2.15 trillion if fully subscribed, according to a statement issued by the Dangote Group yesterday. The SEC’s approval cleared the way for the next stages of the offering. According to the Commission, the proposed offering comprises 4.1 billion ordinary shares at N525 per share, with the potential to raise approximately N2.15 trillion if fully subscribed. In addition, the SEC has registered the company’s existing 120.13 billion ordinary shares. The regulatory approval cleared the refinery’s draft offer documents and authorised the company to proceed with its Completion Board Meeting and Signing Ceremony, marking a significant milestone in the IPO process. The approval was conveyed in a letter to the Lead Issuing House, Vetiva Advisory Services Limited, signed by the Director of the Securities and Investment Services Department of the SEC, Abdulkadir Abbas. SEC also registered the refinery’s existing 120.13 billion ordinary shares as part of the process. SearchPublic Records The proposed offer will give investors an opportunity to acquire shares in one of Nigeria’s largest industrial projects as the refinery moves towards becoming a publicly traded company.