The Crude Oil Refinery Owners Association of Nigeria (CORAN) has said that petrol can sell for as low as N350 per litre if the Federal Government supports local refineries and maintains the naira-for-crude policy.
This statement comes amid a global crash in crude oil prices. Brent crude recently dropped to $65 per barrel, its lowest since 2021, and West Texas Intermediate fell to $61.99.
Despite the fall in crude prices and a drop in petrol landing cost to N865 per litre, the price of petrol in Nigeria has risen at the depot level to N900 per litre, especially in Lagos.
CORAN’s Publicity Secretary, Eche Idoko, said Nigeria is missing out on the benefits of lower global crude prices due to middlemen, logistics costs, foreign exchange issues, and the discontinuation of the naira-for-crude swap.
“If crude drops to $50 per barrel, there’s no reason why petrol should not be sold for N350 per litre. But because of FX, logistics, and middlemen, the price will keep rising,” Idoko said.
He explained that the naira-for-crude policy — where local refineries buy crude oil in naira instead of dollars — was working until it was halted. This, according to him, was the only policy that helped bring petrol prices down from over N700 to near N600.
“These agents don’t have any investment in the system. They just act as links between Nigeria and international oil traders. They gain from importation, so they don’t want local refining to succeed,” he added.
Idoko warned that without renewing the naira-for-crude agreement, prices will continue to rise, even if crude oil prices keep falling internationally.
“We saw results when local refining was supported. Prices dropped. But some people don’t want that. They want Nigerians to keep depending on imported and sometimes substandard petrol. That’s why they’re against local refining and the naira-for-crude initiative.”
The naira-for-crude policy, launched in October 2023, was designed to give local refineries access to crude oil without needing foreign exchange. Under the deal, the Nigerian National Petroleum Company (NNPC) agreed to supply 385,000 barrels per day to refineries like Dangote. However, only 280,000 b/d was delivered before the deal quietly ended in March 2024.
Now, CORAN warns that unless the FG renews the deal, fuel prices may shoot up to N700 or more again.
“Without crude in naira, local refiners are now sourcing crude from abroad just to keep their investments running. It’s a shame that Nigeria, Africa’s biggest oil producer, is playing politics with energy security,” Idoko lamented.
He added that aside from the FX challenges, logistics, shipping costs, and depot mark-ups are also pushing prices up.
“It’s just like when you rent a house. Add agency fee, and the price goes up. Same thing here — middlemen, logistics, FX — they all add cost. That’s why even when crude prices fall, fuel prices go up in Nigeria.”
CORAN is urging President Bola Tinubu, who also serves as Minister of Petroleum Resources, to reinstate the naira-for-crude policy and support local refining to stabilise fuel prices and reduce forex pressure on the economy.
