Thursday, October 9, 2025 - The Crude Oil Refinery Owners Association of Nigeria (CORAN) has identified a major problem that is affecting crude supply to local refineries.
The Association raised concerns about a clause in the
Petroleum Industry Act (PIA) that was designed to support local refining but is
complicated in the area of crude supply arrangements through conflicting
clauses.
The Association observed that while the PIA contains a
domestic crude supply obligation, enforcing it has been difficult because of
the ‘willing buyer, willing seller’ clause.
The PIA felt the domestic crude obligation must be
supported, in the wisdom of the people who drafted it. However, CORAN said
refiners still feel a clog in the wheel of that aspect of the PIA that is
supposed to enable the refinery.
The president of the Association, Momoh Oyarekhua, who
raised the issue also accused the Federal Government and its regulators of
paying little attention to the refining sector, saying their poor understanding
of the industry is hindering its growth despite its central role in achieving
energy security.
Speaking on Tuesday at the second Nigeria Refining Summit
held in Lagos, with the theme ‘Refining – Key to Energy Security in Africa’,
Oyarekhua described refining as “a new and misunderstood industry in Nigeria”
that continues to suffer neglect compared to the upstream and downstream
sectors.
“You cannot have an obligation and also put a condition,
which is ’willing buyer, willing seller’. When you say this is an obligation,
this person must meet it. You don’t say, ‘In case this person thinks like this
or doesn’t want it.’ You should meet it. Let them go and discuss,” he said.
“Many people want to identify with the successful upstream and downstream
sectors, while the midstream is ignored.
“Success has a lot of friends because everyone wants to
identify with success. Upstream is mature; downstream is also mature, because
people have been in the upstream and in the downstream for several decades. But
refining is very new in Nigeria. So, it’s sometimes difficult to convince
people that refining is important,” he said.
According to him, even government Agencies and regulators
have shown limited interest in understanding the challenges of refining
operations.
“Even our regulators, even the government. It’s a big push
to even have refiners in a room for a conversation with the government. It’s
always challenging, because it’s an industry many people don’t understand,”
Oyarekhua lamented.
On the challenges facing the Dangote refinery, the CORAN
president said many Nigerians do not understand the scale and realities of
refinery investment, noting that criticism against the refinery’s operations
stemmed from ignorance of midstream dynamics.
“You see what’s happening to Dangote today. When people try
to talk to me, I say, You don’t understand what is happening. Imagine a man
putting a billion litres of product in a tank, and you are expecting the man to
rely on somebody else to help him distribute it.
“Because the man, in the value chain of what he’s doing,
does not want your failure to affect his business. There are certain things
people do not understand about investors. An investor is not the government.
He’s not a regulator. He’s thinking of how to move his business forward,“ he
added.
The CORAN president further added that Nigerians must
understand the midstream sector to appreciate local refiners’ ongoing struggles
and contributions.
“Nigerians still don’t understand the midstream. So, it’s
only when we understand the midstream that people can begin to see when a
Dangote thinks it is being frustrated or an OPAC thinks it is being frustrated;
you begin to feel and think like them,” he said.
He urged policymakers to create platforms for continuous
dialogue between refiners, government, and other industry players to address
existing bottlenecks and policy conflicts.
“Perhaps this summit in the future is going to converge into
something like a roundtable where people can look at what the key issues are.
No business should be left to collapse. It should be a victory for all that
refining now exists in Nigeria,” he added.
Speaking on the contribution of Alhaji Aliko Dangote to the
country’s refining capacity and energy security, he said, “Give it or take it
away from him, Dangote has created something that today everybody is seeing the
value of. What is that value? The value is that everybody can conveniently have
petrol in their vehicles in Nigeria without queues. If there is a disruption
anywhere in the world, we should be able to have petrol if the crude is made
available within this country.”
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