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…Say it’s distorting prices
By Adewale Sanyaolu
The Crude Oil Refiners Association of Nigeria (CORAN), has faulted current market practices, especially under the “willing buyer, willing seller” model, saying it has created price distortions that make it difficult for local refiners to compete with imported products.
Under Nigeria’s Domestic Crude Supply Obligation (DCSO), the “willing buyer, willing seller” principle means that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) mandates oil producers to allocate crude for domestic refineries, but the price is then negotiated between the producer (seller) and the refinery (buyer) based on market conditions.
This is a framework where the obligated volume is to be sold to a domestic refinery, with the terms including price, mutually agreed upon by the two parties.
However, the Publicity Secretary of CORAN, Mr. Eche Stephen Idoko, in a statement on the recently reversed 15 per cent tax on imported refined products, urged the government to establish a proper, transparent and fair pricing framework for crude oil supplied to domestic refineries.
He said: “CORAN advocates a pricing regime that ensures reasonable margins for refiners while guaranteeing fair value for crude producers.”
However, the request of CORAN was earlier rejected by the Chief Executive Officer of NUPRC, Mr. Gbenga Komolafe, in February 2025, during a meeting with members of the Oil Producers Trade Section (OPTS) and the Independent Petroleum Producers Group (IPPG).
Komolafe declared that the Federal Government would not resort to price-fixing for crude oil, but rather, insisted on the commitment to comply with international best practices to allow the willing-seller, willing-buyer option.
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CORAN further lamented that domestic refineries continue to face challenges in securing sufficient feedstock.
It appealed that the Federal Government should ensure strict enforcement of the DCSO as contained in the Petroleum Industry Act (PIA), while expanding the Naira-for-Crude policy to include all operational refineries, not just those producing Premium Motor Spirit (PMS) also called petrol, saying this would help stabilise operations and reduce dependence on foreign exchange.
The association also canvassed strengthening regulatory certainty and ease of doing business, stressing that streamlining regulatory approvals and ensuring predictable policies will help attract both local and foreign investors.
“Consistent engagement between government and industry stakeholders is vital for building mutual trust and achieving the shared goal of energy self-sufficiency.
“CORAN reiterates its full commitment to partnering with government and all relevant agencies to realize the dream of a Nigeria that refines what it consumes and exports the surplus. We believe that with the right policy mix, the Nigerian refining industry can become a cornerstone of economic diversification, job creation, and industrial development.’’
Komolafe, on his part, explained that while the commission remains committed to regulating the industry as mandated by law, it is also focused on fostering growth within the sector, avoiding arbitrary actions that could dissuade operators or hinder investments adding that in January, the Commission outlined a five-point agenda that would aid increased oil production in 2025.
“The government had expressed commitment to the willing-seller, willing-buyer option which aligns with international best practices and affirmed that the government would support the upstream sector’s optimal functioning without resorting to price-fixing.”
He assured that the commission was at all times willing to positively address operational issues brought up by industry stakeholders so long as they would aid the growth of the sector and are in line with the national interest.
