The Lagos Chamber of Commerce and Industry (LCCI) has urged the Federal Government to include modular refineries in the naira-for-crude oil scheme. The group warned that restricting the initiative to the Dangote Refinery undermines Nigeria’s refining ambitions and sidelines smaller domestic players.
The call comes amid mounting complaints by the Crude Oil Refinery Owners Association of Nigeria (CORAN). The association said its members lack access to affordable local crude, as oil producers continue to favour international buyers who pay in dollars.
Reacting to the situation, LCCI Director-General, Dr. Chinyere Almona, said modular refineries should not struggle to get crude feedstock. She explained that this development discourages investment and deepens Nigeria’s reliance on fuel imports.
She added that the practice contradicts the goals of the Petroleum Industry Act (PIA), which aims to support domestic refining through enforceable local supply commitments.
“Modular refineries should not be struggling to get feedstock while we are pushing a local refining agenda,” Almona said. “The current system gives unfair advantage to large operators while smaller licensed refiners are left out.”
Oil Producers Prioritise Export Over Local Supply
Modular refinery operators said upstream companies still prefer selling crude to international traders for dollar payments. Even when local refineries gain access to crude, they pay international benchmark prices converted into naira. This exposes them to forex risk and extreme pricing volatility.
Almona said this trend violates the Domestic Crude Supply Obligation and Domestic Crude Refining Requirement under the PIA. Though these mandates exist to guarantee feedstock for Nigerian refineries, producers still operate under a “willing buyer, willing seller” model.
She recalled that in 2024, the Federal Government introduced the naira-for-crude initiative to shield local refineries from forex shocks and ensure a steady supply. But by March 2025, the Nigerian National Petroleum Company Limited (NNPC) halted the programme after forward-selling a large portion of its crude.
In April 2025, the government reaffirmed its commitment to the policy through a ministerial committee led by Finance Minister Wale Edun. Despite this, access remains limited, with only the Dangote Refinery benefiting significantly from the scheme.
“This policy was introduced to promote local refining and reduce dependence on imports, but its selective execution is making things worse,” Almona stated. “The concentration of benefits in one refinery while others suffer defeats the purpose of the entire initiative.”
LCCI Calls for Fair Implementation and Stronger Oversight
To address the problem, the LCCI urged the government to enforce Section 109 of the PIA, which mandates local crude supply. It called for volume targets and penalties for non-compliant oil producers.
Almona also called for expanding access to naira-priced crude beyond large refineries. She suggested a hybrid pricing model that allows local refiners to purchase crude at moderate discounts, shielding them from market volatility and forex shocks.
She proposed a dedicated forex window or hedging mechanism for refiners still paying in dollars. The LCCI also demanded long-term crude contracts to enhance investor confidence.
Almona urged the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to increase regulatory oversight and apply sanctions where necessary. She called for expanded upstream capacity, upgraded infrastructure, and tougher action against oil theft to improve crude availability.
She further emphasised the need for transparency in crude allocation. Disclosing volumes, prices, and beneficiaries, she said, would foster trust and help prevent misuse of the policy.
“The naira-for-crude initiative is a powerful tool, but only if implemented with fairness, equity, and transparency,” Almona said. “It cannot become a symbol of monopoly while others with valid licences are denied access.”
According to her, inclusive implementation would transform the sector. If done right, it could help Nigeria reduce fuel imports, stimulate local content, and promote regional development.
