Diesel Nears N2,000/Litre as Refinery Owners Demand More Crude

The Crude Oil Refinery Owners Association of Nigeria has called on the Federal Government to urgently intervene as the price of diesel approaches N2,000 per litre, warning that the development could further increase production costs and worsen food inflation and the cost-of-living crisis.

CORAN, in a statement issued on Tuesday by its Publicity Secretary, Eche Idoko, said the rising cost of diesel was a major concern because the product is widely used by manufacturers, farmers, transport operators, telecommunications companies and other businesses.

The association warned that continued increases in diesel prices would raise the cost of production and transportation while putting additional pressure on manufacturers and consumers.

It urged the government to strengthen domestic refining by supporting all operational refineries, including the Dangote Petroleum Refinery and modular refineries across the country.

CORAN said the Dangote refinery and modular refineries should not be viewed as competitors, stressing that both are important components of Nigeria’s domestic refining capacity and require reliable access to crude oil.

According to the association, Nigeria’s modular refineries have an estimated combined installed capacity of about 35,000 barrels per day and could produce between 2.2 million and 2.8 million litres of diesel daily if operating at full capacity.

It added that the Dangote refinery reportedly produced about 19.1 million litres of diesel daily in July, meaning the combined potential output of the large-scale and modular refineries could reach between 21 million and 22 million litres per day.

CORAN, however, noted that Nigeria’s diesel consumption was estimated at about 14.7 million litres per day in July, while the country imported approximately 244.9 million litres of diesel during the same period.

The association said the figures highlighted the need for urgent measures to increase domestic refining and reduce dependence on imported petroleum products.

It called on the Presidential Committee on Naira-for-Crude to increase and guarantee crude oil supplies to the Dangote refinery while extending the naira-for-crude arrangement to modular refineries.

CORAN also urged the government to establish commercially sustainable crude supply arrangements that would allow Nigerian refineries to operate closer to their installed capacities.

It said increased local diesel production would help reduce the country’s exposure to imported petroleum products, foreign exchange pressures, international freight costs and fluctuations in the global market.

The association further urged the Federal Government to ensure that reforms in the energy sector take into account the impact of rising costs on Nigerians and businesses, stressing that greater domestic refining of Nigeria’s crude would help industries benefit from the country’s status as an oil-producing nation.