The Federal Government is pushing for increased domestic refining of crude oil as part of efforts to reduce petroleum product imports and retain more value from Nigeria’s oil resources.
The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said the country must gradually move away from relying mainly on crude oil exports and focus more on refining, petrochemicals and other industries linked to the petroleum sector.
Lokpobiri, represented by his Technical Adviser on Regulation, Umar Gwandu, spoke at the third Nigeria Oil Refining Summit organised by the Crude Oil Refiners Association of Nigeria in Lagos.
He said ensuring that local refineries have reliable access to crude was critical to the success of Nigeria’s refining ambitions.
According to him, the government is strengthening the Domestic Crude Supply Obligation to ensure that refineries operating in Nigeria can obtain adequate crude.
The Nigerian Upstream Petroleum Regulatory Commission has developed a framework for implementing the obligation in consultation with the Nigerian National Petroleum Company Limited, oil producers and domestic refiners.
The minister said the government wants the framework to develop into a transparent and commercially sustainable system that guarantees crude supply to domestic refineries.
He also stressed that crude available in Nigeria should be capable of reaching local refineries on commercially viable terms.
Chairman of CORAN, Momoh Oyarekhua, said some domestic refineries were still struggling to secure crude despite Nigeria’s large oil reserves.
He called for stricter enforcement of the Domestic Crude Supply Obligation under the Petroleum Industry Act and urged the government to fully implement the naira-for-crude arrangement.
Oyarekhua also proposed crude swap arrangements that would allow refineries to access crude from producing areas located closer to their facilities.
He said expanding local refining would help reduce petroleum product imports, conserve foreign exchange, create jobs and increase the amount of economic value retained within Nigeria.
The CORAN chairman further called for a domestic crude pricing system that considers the quality of crude and the location where it is delivered, rather than adding international logistics costs to domestic transactions.
He urged the government to support refinery development with long-term financing, guarantees and refinancing arrangements, while investing in shared infrastructure such as pipelines, storage facilities, depots, jetties and rail systems.
Meanwhile, Chairman of the Independent Petroleum Producers Group, Adegbite Falade, warned that increasing refinery capacity could put additional pressure on Nigeria’s crude supply.
Falade said domestic refineries could require more than 1.5 million barrels of crude per day in the medium term as existing plants expand, rehabilitated facilities resume operations and new modular refineries come on stream.
He noted that Nigeria’s liquid oil production stood at 1.68 million barrels per day in August 2026, according to data from the NUPRC.
He said the country could face a narrow supply margin if refinery demand rises substantially while production remains around current levels.
Such pressure, he said, could affect export commitments, government revenues, crude-backed financing and other obligations, particularly when production disruptions occur.
Falade therefore stressed that Nigeria must increase crude production alongside the expansion of its refining capacity.
He called for greater exploration, faster development of oil fields, increased marginal-field production and improved access to capital for upstream operators.
He also urged the government and industry to protect and modernise crude transportation infrastructure, including pipelines, terminals, storage facilities, jetties and marine logistics.
According to Falade, Nigeria needs a functional domestic crude market that can combine supplies from different producers, manage varying crude grades and facilitate transparent crude swaps.
He disclosed that compliance with the Domestic Crude Supply Obligation had risen to about 97.4 per cent in the second quarter of 2026, compared with approximately 41 per cent in the first quarter, citing NUPRC data.
Falade added that the 34-member IPPG now accounts for more than half of Nigeria’s total oil and gas production.
The Federal Government’s refining push comes as Nigeria seeks to expand domestic processing capacity and reduce its reliance on imported petroleum products. Industry stakeholders, however, say achieving this will require sufficient crude production, competitive pricing, reliable infrastructure and continued inv
