The Crude Oil Refinery Owners Association of Nigeria is calling on the government to adopt a domestic crude oil pricing framework that removes freight and maritime insurance costs from the feedstock price charged to local refineries — a move it says could significantly lower the cost of producing petrol, diesel, and aviation fuel for Nigerian consumers.
In a policy statement issued by the association’s Publicity Secretary, Eche Idoko, CORAN argued that the proposed model is especially timely given current volatility in global oil markets. The group noted that locally supplied crude does not require international shipping or maritime insurance, making it inequitable to price domestic feedstock on terms designed for internationally traded barrels.
“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,” the association said.
CORAN maintained that this single adjustment could meaningfully reduce feedstock costs for local refiners, enabling them to supply petroleum products at more competitive and stable prices to the Nigerian market. The group also warned that without a strong domestic refining ecosystem, Nigeria remains dangerously exposed to imported price shocks from geopolitical developments abroad.
The Nigerian Upstream Petroleum Regulatory Commission is reported to have acknowledged the need for a workable domestic pricing structure and committed to facilitating further stakeholder consultations aimed at reaching a mutually agreed framework. CORAN urged the regulator to urgently advance those consultations.
“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,” the association stated.
Source: punchng.com