Uche Cecil Izuora
The Crude Oil Refinery Owners Association of Nigeria (CORAN), has strongly opposed consistent issuance of import licenses for white products when local refiners investments are being made to suffer significant losses.
The Association said that Nigeria’s downstream petroleum sector has reached a turning point, arguing that policy neutrality is no longer enough to support sustainable local refining.
A review of the industry titled “TRUE FAITH IN NIGERIA’S DOWNSTREAM: Why Local Refinery Companies Built While Importers Traded,” the CORAN said years of dependence on imported petroleum products are giving way to a growing local refining base, though significant challenges remain.
According to the Associated the current phase of Nigeria’s downstream development has reopened a national debate on who has shown real faith in the sector: companies that invested in building refineries within the country, or operators whose business models focused on importing fuel.
“The answer lies not in rhetoric or market positioning, but in capital behaviour, risk exposure and long-term commitment. The faith in an economy is best measured by what investors are willing to build and what risks they are prepared to carry over time,” CORAN said.
According to the association, local refinery companies, including large-scale, mid-sized and modular operators, have committed substantial capital to fixed industrial assets in Nigeria. It noted that refining is one of the most capital-intensive parts of the petroleum value chain, with exposure to construction risk, crude supply uncertainty, foreign exchange volatility, power and logistics constraints, evacuation challenges, regulatory shifts and changing policy frameworks.
It added that once a refinery is built, the investment is largely immobile and cannot be easily sold, relocated or exited without losses. Beyond construction, refineries require continuous operations, compliance with product standards, environmental management, engagement with host communities and sustained participation in the domestic market.
“In this sense, refining is not a trading strategy but an industrial commitment,” the Association said, adding that local refinery companies have invested tens of billions of dollars in downstream assets that depend on Nigeria’s success as an energy-producing and refining country.
In contrast, CORAN said Nigeria’s downstream sector for much of the past 30 years was shaped by an import-led trading model, particularly during the fuel subsidy era. It noted that fuel importation became profitable due to price differences, access to foreign exchange, weak consumption verification and subsidy reimbursement systems.
The CORAN said investigations during that period showed Nigeria paid for volumes of petrol far above realistic domestic consumption, leading to large financial losses. Despite the profits generated, CORAN said reinvestment into refining capacity did not follow.
Official data, it noted, show that Nigeria imported more than 20 billion litres of PMS in 2023, only slightly lower than in 2022. CORAN said this demonstrates how deeply import dependence remains embedded in the system.
It cited National Bureau of Statistics data reported by Reuters, which show that petrol imports rose to about ₦15.4 trillion in 2024, compared with ₦7.5 trillion in 2023. It said these imports represent significant foreign exchange outflows that could have supported domestic refining, logistics, storage, petrochemical activity and employment.
The refiners body questioned how profits from the importer-dominated period were used, noting that large-scale investment in refining and processing infrastructure did not occur. Instead, it said capital flowed into real estate, financial assets and upstream acquisitions, with crude often sold to international traders rather than refined locally.
Nigeria is now facing the outcomes of two different downstream approaches, CORAN said. One focuses on domestic value addition, energy security and long-term capacity building. The other relies on continued access to ports, foreign exchange and import permissions.
It noted that these differences become clearer during reform discussions. Local refiners, it said, support clear crude supply rules, pricing clarity and managed imports when domestic supply is available, while importers tend to push for unrestricted access.
CORAN said the country has reached a stage where policy neutrality is no longer sufficient. It called for guaranteed and transparent crude supply to domestic refineries through enforceable mechanisms, conditional import licensing where local supply meets demand, and alignment of foreign exchange and pricing policies.
“This is a wake-up call for clear policy differentiation,” CORAN said, adding that supporting local refining is a national choice rather than a corporate dispute.
In conclusion, the association said local refinery companies have shown their commitment by building and operating facilities in Nigeria, while the importer model relied on cargoes and margins. As Nigeria plans the future of its downstream sector, CORAN said policy must reflect long-term commitment, stating that faith is shown by what is built and sustained in the national interest.