Diesel Nears N2,000 as Refiners Demand More Crude Supply

• Diesel prices are approaching N2,000 per litre, prompting refinery owners to warn of higher production, transportation, and food costs.

• CORAN says Nigerian refineries could potentially produce 21 million to 22 million litres of diesel daily, above reported July consumption of 14.7 million litres.

• The association wants the Naira-for-Crude scheme extended to modular refineries and adequate crude supplies guaranteed to domestic refiners.

September 09, () — The price of diesel is approaching N2,000 per litre, raising fresh concerns over production costs and inflation as the Crude Oil Refinery Owners Association of Nigeria (CORAN) called for urgent government intervention to strengthen domestic refining.

CORAN, in a statement by its Publicity Secretary, Eche Idoko, said the rising cost of diesel should concern Nigerians because the fuel is widely used by factories, farms, transport operators, telecommunications companies and other businesses.

The association warned that sustained increases would raise production and logistics costs, worsen food inflation and place additional pressure on manufacturers already dealing with high operating expenses.

Refiners say local capacity can cover demand

CORAN said Nigeria should focus on strengthening all domestic refineries, including the Dangote Petroleum Refinery and modular plants, rather than treating them as competing interests.

The association stressed that Dangote Refinery is also a Nigerian refinery and national asset that requires adequate and predictable access to domestic crude to operate efficiently.

According to CORAN, Nigeria’s modular refineries have an estimated combined installed capacity of about 35,000 barrels per day.

At full capacity, they could produce between 2.2 million and 2.8 million litres of diesel daily, depending on their configurations and product yields.

The association added that Dangote Refinery reportedly produced about 19.1 million litres of diesel daily in July.

Combined, CORAN estimates that the large and modular refineries could potentially produce between 21 million and 22 million litres of diesel per day.

That compares with reported national diesel consumption of about 14.7 million litres per day in July.

Despite the potential surplus, Nigeria imported about 244.9 million litres of diesel during the month, according to CORAN.

The association said the gap highlighted the need to improve refinery utilisation and address constraints preventing domestic plants from producing closer to their installed capacities.

CORAN seeks expanded Naira-for-Crude scheme

CORAN called on the Presidential Committee on Naira-for-Crude to increase and guarantee adequate crude supplies to Dangote Refinery.

It also urged the government to extend the Naira-for-Crude arrangement to existing modular refineries, arguing that access to competitively priced crude would help domestic plants increase production.

The association said crude supply arrangements should be commercially sustainable and predictable enough to enable Nigerian refineries to plan operations and maximise their installed capacity.

Higher domestic diesel production, it added, would reduce the country’s exposure to imported petroleum products, foreign exchange pressures, international freight costs and international market disruptions.

The association’s argument comes as diesel remains an important input across the Nigerian economy. Unlike petrol, which is predominantly associated with road transportation, diesel powers generators, industrial equipment, agricultural machinery, logistics operations and other productive activities.

A sustained increase in diesel prices therefore risks feeding into the prices of goods and services as businesses pass higher energy and transportation costs to consumers.

CORAN said the government’s energy-sector reforms must produce benefits that Nigerians and businesses can feel.

“Give Dangote the crude it requires. Give modular refineries access to naira-for-crude. Let Nigerian crude power Nigerian industry,” the association said.

The central issue, according to CORAN, is therefore not simply the availability of refining capacity, but whether domestic refineries can consistently obtain crude and operate at commercially viable levels.

If more Nigerian crude can be processed locally, the association believes increased diesel production could reduce imports and ease some of the cost pressures currently affecting businesses and consumers.