The Federal Government is considering measures to reduce the cost of crude oil for domestic refineries and improve access to locally produced feedstock.
The proposals include allowing oil producers to deliver crude directly to nearby refineries and giving refiners discounts on transportation and handling costs included in crude prices.
The measures are expected to be discussed at the next monthly meeting involving the Nigerian Upstream Petroleum Regulatory Commission, domestic refiners and crude oil producers.
The Crude Oil Refinery-owners Association of Nigeria said direct delivery could allow producers, particularly those linked to international oil companies, to supply refineries close to their production facilities. The arrangement could reduce reliance on long-distance trunkline transportation and lower logistics costs.
CORAN spokesperson, Eche Idoko, said another proposal would allow refiners to receive discounts for freight and handling charges included in Brent-linked crude prices when such costs are not actually incurred because the crude is collected directly from production facilities.
The proposed changes come amid complaints from local refiners over the high cost of domestically produced crude. Dangote Refinery has estimated that Nigeria’s pricing structure can add between $3 and $4 per barrel to the cost of crude purchased by domestic refiners.
The development comes despite improved compliance with the Domestic Crude Supply Obligation. NUPRC data showed that producer compliance exceeded 90 per cent in the second quarter of 2026, compared with less than 43 per cent in the previous quarter.
However, the increase in compliance does not necessarily mean that refiners are receiving sufficient crude at competitive prices. Domestic crude transactions are still conducted under a willing-buyer, willing-seller arrangement.
A senior NUPRC official confirmed that the proposals were being considered, particularly following pressure from inland refineries, but said issues relating to crude quality and pricing would need to be resolved.
The Federal Government is seeking to strengthen domestic refining and reduce Nigeria’s dependence on imported petroleum products by improving access to locally produced crude.
