The price of diesel has climbed towards N2,000 per litre, prompting the Crude Oil Refinery Owners Association of Nigeria to call for urgent government action to prevent further pressure on businesses and consumers.
CORAN said the rising cost of diesel could drive up expenses for manufacturers, farmers, transport operators, telecommunications companies and other businesses that depend heavily on the product.
In a statement issued by its Publicity Secretary, Eche Idoko, the association warned that prolonged increases in diesel prices could worsen production and transportation costs, deepen food inflation and add to the economic difficulties facing Nigerians.
CORAN urged the Federal Government to focus on expanding domestic refining capacity by supporting both the Dangote Petroleum Refinery and modular refineries across the country.
The association stressed that Dangote Refinery and the smaller modular plants should not be treated as competitors, noting that both are important components of Nigeria’s domestic refining industry. It also called for reliable access to locally produced crude oil to enable the refineries to operate efficiently.
According to CORAN, modular refineries in Nigeria have a combined installed capacity of about 35,000 barrels per day. At full capacity, they could produce between 2.2 million and 2.8 million litres of diesel daily, depending on their individual configurations and output mix.
The association added that Dangote Refinery produced an estimated 19.1 million litres of diesel per day in July. With both large-scale and modular refineries operating effectively, it said domestic diesel production could rise to between 21 million and 22 million litres daily.
CORAN noted that this would be significantly above the reported national diesel consumption of about 14.7 million litres per day in July. Despite this potential, Nigeria imported approximately 244.9 million litres of diesel during the same month.
The figures, it said, highlight the need for stronger efforts to increase local refining and reduce the country’s reliance on imported petroleum products.
To address the situation, CORAN called on the Presidential Committee on Naira-for-Crude to ensure adequate crude supplies for Dangote Refinery and extend the arrangement to modular refineries.
It also urged the government to establish commercially viable crude supply agreements that would allow domestic refineries to operate closer to their installed capacities.
The association said greater local production of diesel would reduce exposure to foreign exchange pressures, international shipping costs and fluctuations in global petroleum markets.
CORAN maintained that energy policies should take into account the impact of rising fuel costs on ordinary Nigerians and businesses, urging the government to move beyond policy commitments and provide refineries with the crude needed to increase output.
It said Nigeria’s crude resources should be used more effectively to support domestic industries and reduce the economic burden associated with importing refined petroleum products.
