Federal Government Assures Sustainable Crude Supply to Local Refiners

By Naija Enquirer Staff

The Federal Government has reiterated its commitment to ensuring a steady and sustainable supply of crude oil to local refineries as part of efforts to end Nigeria’s dependence on imported petroleum products.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, made the assurance on Tuesday at the second Nigeria Refining Summit held in Lagos, themed “Refining – Key to Energy Security in Africa.”

Lokpobiri said the government remains determined to guarantee feedstock security for all licensed refineries while strengthening the Domestic Crude Oil Supply Obligation (DSCO) to ensure that every barrel of crude produced in Nigeria contributes to both domestic demand and export commitments.

“Beyond licensing, government has continued to consolidate on facilitating access to crude oil supply through the effective implementation of the Domestic Crude Oil Supply Obligation. No nation can claim energy independence if it cannot refine its own crude,” Lokpobiri stated.

Government Sustains Naira-for-Crude Policy

The Minister reaffirmed that the naira-for-crude sales policy would be sustained to cut production costs, reduce exposure to foreign exchange volatility, and enhance the competitiveness of local refiners.

He cited the success of indigenous refineries such as the Dangote Refinery & Petrochemical, Waltersmith Petroman Refinery, and Aradel Holdings as evidence of Nigeria’s growing capacity to refine its own crude oil.

“These projects are more than just facilities; they are symbols of confidence in our policy direction. Nigeria is committed to replicating these successes across all oil-producing states,” he added.

Streamlined Licensing and Regulatory Support

Lokpobiri revealed that through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the government has streamlined the refinery licensing process — from establishment to construction and operation — ensuring that genuine investors are supported rather than hindered by bureaucracy.

He emphasized that the government’s current focus is to strengthen collaboration among key regulatory agencies — including the NMDPRA, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and security agencies — to address crude theft and pipeline vandalism while building trust with host communities.

Nigeria Targets Regional Refining Hub Status

Lokpobiri disclosed that as part of Nigeria’s strategy to extend its refining influence beyond its borders, the country has launched the West African Fuel Reference Market. The initiative aims to position Nigeria as a regional refining and product supply hub for the West African subregion.

“With increased local refining capacity, Nigeria will not only meet domestic demand but also become a dependable supplier of refined products to neighbouring countries — reducing reliance on distant refineries and maritime imports,” he explained.

He noted that this vision aligns with the African Union’s energy integration agenda and the goals of the African Continental Free Trade Area (AfCFTA).

Key Policy Priorities

The Minister outlined the Federal Government’s top priorities going forward:

• Ensuring feedstock security for all licensed refiners.
• Deepening fiscal incentives to attract new investments.
• Enhancing collaboration among regulatory bodies and security agencies to combat crude theft.
• Strengthening relationships with host communities for operational stability.
• Fostering regional collaboration for energy logistics and infrastructure sharing.

Lokpobiri emphasized that Africa’s path to energy security depends on the growth of its refining sector and stronger cooperation among its energy institutions.

“The path to Africa’s energy security runs through the gates of its refineries. The Federal Government remains fully committed to supporting indigenous refiners, strengthening regulatory institutions, and creating an enabling environment for sustainable downstream growth,” he said.

He described the CORAN Summit 2025 as a renewed call to industry players, regulators, investors, and policymakers to unite in building an Africa that refines what it produces and powers its development from within.

Regulators Reaffirm Commitment to Local Refiners

Also speaking, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, represented by Boma Atiyegoba, said the Commission was working closely with the NMDPRA to ensure that local refiners have regular access to crude oil.

“There is a metric agreed upon by all stakeholders to allocate crude volumes to local refiners under the Domestic Supply Obligation. This is not a request; it is a regulatory obligation to enhance Nigeria’s energy security,” Komolafe explained.

He added that allocations are determined based on companies’ production forecasts and other indices, ensuring fair distribution and strict enforcement of supply obligations.

Stakeholders at the summit reaffirmed that with consistent policy implementation, local capacity growth, and regulatory support, Nigeria is well on track to achieving energy independence and regional market leadership.