Modular refinery operators have raised concerns over the high cost of domestically supplied crude oil, saying current pricing terms make it difficult for them to participate in the Domestic Crude Supply Obligation scheme.
The Crude Oil Refinery Owners Association of Nigeria said its members did not lift crude allocated to local refiners in the second quarter of 2026 because of what it described as unrealistic commercial terms and the use of international pricing benchmarks such as Brent, WTI and Platts.
According to data from the Nigerian Upstream Petroleum Regulatory Commission, 53.7 million barrels of crude oil and condensate were supplied to domestic refineries between April and June, representing 97.4 per cent performance under the DCSO framework.
However, CORAN spokesperson Eche Idoko said modular refineries were unable to benefit from the arrangement because international benchmark pricing significantly increases their crude acquisition costs.
He explained that modular refineries often purchase crude directly from producing assets and are responsible for transporting and evacuating the crude to their facilities. Using international benchmarks without adjusting for the actual domestic delivery point, he argued, could result in refiners effectively paying twice for logistics.
Idoko called for a domestic crude pricing model that reflects the actual point of delivery and removes logistics costs that are not incurred by producers.
The NUPRC noted that the DCSO operates on a willing-buyer, willing-seller basis, meaning that crude volumes allocated or offered to refiners may not necessarily translate into actual volumes lifted.
