A heated debate has emerged in Nigeria's refining industry, with the Crude Oil Refineries Association of Nigeria (CORAN) taking aim at the government's 'willing buyer, willing seller' crude sales model. This model, they argue, is distorting prices and making it incredibly challenging for local refiners to compete with imported products.
Let's break this down. Under Nigeria's Domestic Crude Supply Obligation (DCSO), the 'willing buyer, willing seller' principle means that oil producers are mandated to allocate crude for domestic refineries. However, the price is then negotiated between the producer and the refinery based on market conditions. This framework, CORAN argues, creates an uneven playing field.
Mr. Eche Stephen Idoko, CORAN's Publicity Secretary, has called for a transparent and fair pricing framework for crude oil supplied to domestic refineries. He believes that a pricing regime should ensure reasonable margins for refiners while guaranteeing fair value for crude producers. But here's where it gets controversial: the CEO of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, rejected this request in February 2025, stating that the Federal Government would not engage in price-fixing for crude oil.
CORAN further highlights that domestic refineries struggle to secure sufficient feedstock. They urge the Federal Government to enforce the DCSO as outlined in the Petroleum Industry Act (PIA) and expand the Naira-for-Crude policy to all operational refineries, not just those producing Premium Motor Spirit (PMS). This, they believe, will stabilize operations and reduce dependence on foreign exchange.
The association also emphasizes the need for regulatory certainty and ease of doing business, arguing that streamlined regulatory approvals and predictable policies will attract both local and foreign investors.
"Consistent dialogue between the government and industry is key to building trust and achieving energy self-sufficiency," CORAN states. They reiterate their commitment to partnering with the government to realize the vision of a Nigeria that refines its own consumption and exports the surplus, believing that the right policies can drive economic diversification and job creation.
Mr. Komolafe, on the other hand, explains that while the commission regulates the industry, it also fosters growth, avoiding actions that may deter operators or investments. He highlights the government's commitment to the 'willing-seller, willing-buyer' option, aligning with international best practices, and supporting the optimal functioning of the upstream sector without price-fixing.
So, who's right here? Is the 'willing buyer, willing seller' model truly distorting prices, or is it a fair and transparent approach? And this is the part most people miss: what impact will this debate have on Nigeria's energy landscape and its journey towards self-sufficiency?
What are your thoughts? Do you think CORAN's concerns are valid, or is the government taking the right approach? Let's discuss in the comments and explore these intriguing perspectives further!
