Debate Grows Over Crude Pricing for Local Refineries
By Ahmed Isah
A public affairs commentator, Comrade Aminu I.B., has called for a review of Nigeria’s crude oil pricing policy for domestic refineries to ensure Nigerians benefit more from the nation’s petroleum resources.
Aminu made the observation while reacting to the Federal Government’s policy of selling crude oil to the Dangote Refinery at prices close to the international market rate.
According to him, Nigeria should consider prioritising its citizens by supplying crude oil to local refineries at relatively lower prices to make refined petroleum products more affordable.
He said such a policy could enable Nigerians to enjoy cheaper fuel while the country continues to earn significant revenue from crude oil exports in the international market.
Aminu cited global oil market dynamics where countries adopt flexible pricing strategies to maintain competitiveness and secure economic advantage.
He noted that after sanctions imposed by the European Union and the United States on Russian oil exports following the outbreak of the Ukraine conflict, Russia reportedly reduced the price of its crude to attract buyers in Asian markets, particularly India and China.
According to him, a similar approach could be adopted to support Nigeria’s domestic refining industry and strengthen economic growth.
“If Nigeria sells crude to local refineries at a lower price, the cost of refining petrol, diesel and aviation fuel could reduce significantly, thereby lowering pump prices for Nigerians,” he said.
Aminu added that the three tiers of government could still earn substantial revenue from crude oil exports in the international market while ensuring improved living standards for citizens.
Industry analysts note that the Federal Government has introduced measures aimed at boosting local refining capacity through policies that prioritise domestic crude supply.
Under the Petroleum Industry Act (PIA), crude oil producers are required to allocate a portion of their production to domestic refineries through the Domestic Crude Supply Obligation.
The initiative is intended to ensure steady feedstock for refineries operating in Nigeria and reduce the country’s dependence on imported petroleum products.
The Dangote Refinery, located in Lagos, is Africa’s largest refinery with a capacity of about 650,000 barrels per day and is expected to significantly reduce Nigeria’s fuel import bill.
However, energy policy experts say the debate over crude pricing for domestic refineries reflects a broader policy question on how Nigeria can balance export revenue with the need to ensure affordable energy for its population.
They note that as more refineries come on stream, government policies on crude supply and pricing will play a critical role in determining whether Nigeria can fully maximise the benefits of its vast petroleum resources.
