The Crude Oil Refinery Owners Association of Nigeria (CORAN) has expressed strong support for Nigeria’s downstream petroleum sector while calling for a policy shift away from mere neutrality towards more active government support for local refiners.

In a statement released on Monday, titled “True Faith in Nigeria’s Downstream: Why Local Refinery Companies Built While Importers Traded,” CORAN declared that Nigeria has reached a pivotal point where policy neutrality is no longer sufficient to drive long-term growth in the sector. The association emphasized that while Nigeria has historically depended on imported petroleum products, local refining investments are now pushing the country towards a self-sustaining refining industry—though significant challenges remain.

The Shifting Landscape: Local Refineries vs. Importers

CORAN pointed out that the era of fuel subsidies and dependence on imported petroleum has resulted in massive foreign exchange losses and weak domestic refining capacity. However, local refinery investments have opened a fresh national dialogue: Who has shown true commitment to Nigeria’s downstream sector—those who built refineries or those who relied on fuel imports?

The association argued that capital investment, risk-taking, and long-term commitment are the true measures of faith in Nigeria’s petroleum future. They noted that local refinery companies—whether large-scale plants or modular refineries—have invested billions of dollars into fixed industrial infrastructure in Nigeria. Refining is one of the most capital-intensive and risk-exposed sectors, demanding strict adherence to operational discipline, regulatory compliance, and environmental responsibility.

The Reality of Refining vs. Importing

CORAN stressed that refining is an industrial commitment, not a mere trading strategy. Investors in local refineries face a range of challenges, including construction risks, foreign exchange volatility, power and logistics constraints, regulatory inconsistencies, and more. Once built, refineries are immobile assets that require long-term operational discipline and community engagement. This makes refining a more permanent investment compared to the transient nature of trading in imported petroleum products.

In contrast, the importation model has historically failed to support structural growth. During the fuel subsidy era, petroleum importation became highly lucrative due to price arbitrage and preferential access to foreign exchange, leading to massive profits but little reinvestment into domestic refining capacity. CORAN emphasized that, despite the large profits made from fuel imports, this money was largely diverted into real estate and non-productive investments rather than refining infrastructure.

The Struggles with Import Dependency

Despite the removal of the subsidy, Nigeria continues to heavily rely on fuel imports. CORAN referred to National Bureau of Statistics (NBS) data, noting that in 2023, Nigeria imported over 20 billion liters of petrol. This figure was only slightly lower than the previous year, highlighting the entrenched importation model. Additionally, trade data from Reuters revealed that Nigeria’s petrol imports surged to ₦15.4 trillion in 2024, more than double the amount recorded in 2023, indicating massive outflows of foreign exchange.

These imports, CORAN argued, could have been used to build a thriving local refining industry, creating jobs, developing infrastructure, and strengthening the domestic economy. Instead, the importation model consumed national wealth without creating lasting capacity.

The Call for Policy Change

CORAN believes that the time has come for a deliberate policy shift to support local refineries. The association called for:

1. Guaranteed and transparent crude supply for domestic refineries, through enforceable, rule-based allocation mechanisms that are free from discretion.
2. Conditional import licensing, allowing imports only when domestic refining capacity cannot meet demand.
3. Alignment of foreign exchange and pricing policies to ensure that local refineries are not disadvantaged.

These policies should not be seen as protectionism, CORAN argued, but rather as standard practices in serious energy-producing economies. The association also pointed out that local refiners are focused on domestic value addition, energy security, and long-term resilience, while importers often rely on access to ports, foreign exchange, and import regimes.

A Future Beyond Imports

CORAN emphasized that the country must choose between two contrasting downstream philosophies: one focused on local refining and the other on importation. They warned that continuing to rely on imports exposes Nigeria to foreign exchange shocks, supply disruptions, and fiscal instability. On the other hand, supporting local refining would strengthen energy security, create skilled jobs, and deepen industrial capacity.

The association concluded that local refinery companies have already demonstrated their faith in Nigeria’s future by building plants and committing capital. In contrast, the importer model historically relied on cargoes and margins.

Conclusion: Policy Must Align with Investment

CORAN urged that Nigeria’s downstream sector should align with demonstrated commitments, focusing on what is built, sustained, and invested in the national interest. As Nigeria charts its future in refining, the association stressed that policy must support the long-term commitment of local refinery investors and shift away from the transient importation model.

In the end, faith in the downstream petroleum sector should be measured by what investors are willing to risk and build, not by short-term trading profits. CORAN’s call to action is clear: the time for policy differentiation and a local refining-first approach is now.