The Crude Oil Refinery Owners Association of Nigeria has called for the adoption of a domestic crude oil pricing framework that would allow local refineries to access crude at more realistic prices, saying such a move would help stabilise fuel costs and shield Nigerians from global oil market volatility.
The association said removing freight and insurance components from the pricing structure for crude supplied to Nigerian refineries would significantly lower feedstock costs and enable local refiners to produce petroleum products at more stable and affordable prices.
In a policy statement sent out by the Publicity Secretary of CORAN, Eche Idoko, the group said the proposed pricing model had become more urgent in view of growing geopolitical tensions in the Middle East, particularly involving Iran, which are already affecting global oil markets.
According to the association, adopting a pragmatic domestic pricing structure would help insulate the Nigerian economy from external shocks that often trigger spikes in the cost of refined petroleum products.
“The Crude Oil Refinery Owners Association of Nigeria believes that adopting a fair and pragmatic crude oil pricing framework for domestic refineries can significantly insulate Nigerians from the price volatility currently being triggered by the ongoing tensions in the Middle East, particularly the conflict involving Iran,” the refiners said.
It explained that one of the key elements of the proposed framework would be the creation of a domestic crude pricing mechanism that excludes freight and maritime insurance costs, noting that locally supplied crude does not incur such charges.
“A key element of such a framework would be the establishment of a domestic crude pricing mechanism that excludes freight and insurance components, similar to the structure under which benchmark crudes such as Brent and WTI are traded.
“Since locally supplied crude does not require international shipping, freight charges, or maritime insurance costs, removing these elements from the pricing formula would allow crude to be supplied to Nigerian refineries at a more competitive and realistic domestic price,” CORAN advised.
The association noted that such an adjustment could significantly reduce the cost of crude feedstock for domestic refineries, making it easier for them to supply refined products to the local market at competitive prices.
“CORAN maintains that this adjustment alone could reduce the effective cost of crude feedstock to domestic refineries by a significant margin, enabling local refiners to produce petroleum products, particularly diesel, petrol, and aviation fuel, at more stable and affordable prices for the Nigerian market,” the body added.
The group also revealed that the issue featured prominently at the 2025 CORAN Refining Summit, where stakeholders discussed ways to improve crude supply terms for domestic refiners.
According to the group, the Nigerian Upstream Petroleum Regulatory Commission acknowledged the need for a workable domestic pricing structure during the summit and committed to facilitating further consultations among industry stakeholders.
“This issue was one of the major highlights of discussions during the 2025 CORAN Refining Summit, where the Nigerian Upstream Petroleum Regulatory Commission acknowledged the importance of developing a workable domestic crude pricing structure and agreed to facilitate further stakeholder engagements aimed at reaching a mutually beneficial pricing framework,” it said.
CORAN stressed that continuing the regulatory engagement has become critical as global oil markets react to geopolitical tensions, warning that Nigeria remains vulnerable to imported price shocks without a strong domestic refining ecosystem.
“CORAN believes that following through on this proactive regulatory dialogue is critical at this time. With global oil markets already reacting to geopolitical tensions, ensuring predictable and fair crude supply terms for domestic refineries will not only strengthen Nigeria’s energy security but also protect the broader economy from imported price shocks, the statement read.
The association added that establishing a stable domestic refining system supported by fair crude pricing would have broader economic benefits for the country.
CORAN urged the NUPRC to urgently continue stakeholder consultations aimed at developing and implementing a transparent domestic crude pricing framework.
“A stable domestic refining ecosystem supported by fair crude pricing will help stabilise fuel supply, moderate pump price volatility, support industrial production, and protect household purchasing power, particularly at a time when energy costs have a direct impact on transportation, agriculture, and manufacturing across the country.
“CORAN, therefore, reiterates its call for urgent continuation of the NUPRC-led stakeholder consultations to operationalise a transparent domestic crude pricing framework that supports Nigeria’s refining capacity and safeguards the national economy,” the association stated.
