The federal government and the Crude Oil Refinery Owners Association of Nigeria (CORAN) have called for a reliable framework for crude oil supply to domestic refineries.

The minister of state for petroleum resources (Oil), Heineken Lokpobiri, made the call in a keynote address at the 3rd Nigeria Oil Refining Summit (NORS) 2026 on Monday in Lagos.

Mr Lokpobiri, represented by his technical adviser, Umar Gwandu, said the Domestic Crude Supply Obligation (DCSO) should evolve into a reliable, transparent and commercially bankable system.

“The domestic supply obligation should not be viewed merely as an administrative allocation mechanism,” he said.

He said the federal government’s Naira-for-Crude initiative was designed to facilitate the supply of Nigerian crude to domestic refineries in local currency.

He said the initiative was intended to reduce foreign exchange pressure and improve predictability in crude procurement.

Mr Lokpobiri said the government recognised the need to balance upstream commercial returns with the feedstock requirements of local refineries.

He said commercial arrangements should operate on a willing-buyer, willing-seller basis while ensuring transparency and predictability.

“The policy challenge is one of alignment, not confrontation,” he said, adding that government’s role was to provide a level and predictable playing field.

Mr Lokpobiri said the government would support measures that create a bankable regulatory environment and attract capital into the petroleum value chain.

Also speaking, the chairman of CORAN, Momoh Oyarekhua, said some domestic refineries still struggled to secure crude on commercially viable terms in spite of Nigeria’s substantial resources.

He warned that the situation could undermine refinery utilisation and prolong dependence on imported petroleum products.

Mr Oyarekhua proposed full institutionalisation of Naira-for-Crude arrangements for qualifying domestic refineries, including modular refineries.

He called for a domestic crude pricing template that reflects crude quality, delivery points and actual evacuation costs.

He said the template should also recognise logistics costs avoided when crude is supplied locally instead of being exported and re-imported as products.

Mr Oyarekhua urged stronger enforcement of the DCSO under Section 109 of the Petroleum Industry Act (PIA), while preserving workable commercial arrangements between producers and refiners.

He also proposed crude swaps and proximity-based supply arrangements to enable nearby producing assets to supply local refineries.

He said such arrangements would reduce unnecessary transportation through distant export infrastructure and improve commercial viability.

Mr Oyarekhua called for reduced petroleum product imports as domestic refining capacity grows and for investment in pipelines, depots, storage terminals and jetties.

“Support the refinery. Support the pipeline. Support the storage terminals,” he said.

He said the objective should be for Nigerian crude to increasingly supply Nigerian refineries, meet local demand and support exports to African markets.

The summit brought together regulators, refinery operators, producers and other stakeholders in the oil and gas value chain. 

(NAN)