Rising Global Oil Prices Expose Nigerian Refineries to Higher Costs, Expert Raises Alarm
- An Energy expert has said that Nigerian refineries are exposed to the volatility of the global market
- He noted that some local refineries still depend on foreign feedstock despite Nigeria’s production
- He stressed that high costs of feedstocks could further drive up fuel prices in Nigeria
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology, and macroeconomic trends in Nigeria.
Energy expert and National Publicity Secretary of the Crude Oil Refineries Association of Nigeria (CORAN), Eche Idoko, has explained that the reliance of local refineries on foreign crude supplies is responsible for the recent hike in petrol prices.
Source: UGC
Idoko said that Nigeria’s local refineries that depend on imported crude oil are facing mounting cost pressures as global prices rise amid tensions in the Middle East due to the war between Iran and US-backed Israel.
He stressed that domestic refineries are vulnerable to international market volatility, an abnormal situation for an oil-producing country.
He said:
“As the conflict in Iran intensifies and global crude oil prices surge, local refineries in Nigeria that rely on externally sourced crude are increasingly exposed to severe price volatility. Their feedstock costs remain directly tied to the same geopolitical risks and market disruptions driving up international crude prices, placing them at a significant operational disadvantage.”
This situation, he explained, exposes local refineries to foreign pricing systems, exchange rate fluctuations, shipping costs, and supply uncertainties.
“This means they are effectively importing not just crude oil, but also the instability associated with global markets,” he added.
Call for improved domestic crude supply
Idoko emphasised that subjecting domestic refineries to global crude oil marketing, characterised by instabilities and economic volatilities, is avoidable, urging the federal government to prioritise local supply of crude to domestic refineries.
He argued that Nigerian refineries should have easy access to locally produced crude rather than sourcing from international markets.
He also called for greater transparency and consistency in crude allocation, noting that unclear supply arrangements discourage investment and long-term planning.
Push for increased crude allocation
The Energy expert and Corporate Lawyer also urged the federal government to increase the volume of crude oil made available to local refiners.
He said an adequate and predictable supply is essential to improving refinery utilisation and reducing dependence on foreign sources.
He maintained that continued reliance on imported crude undermines Nigeria’s energy security goals and exposes the domestic market to avoidable external shocks.
Call for urgent reforms
The CORAN spokesperson pointed out that rising crude prices globally are already pushing up production costs for local refineries and consequently driving up retail prices of petrol and other refined petroleum products in Nigeria.
He said the current situation in the global oil market should serve as a wake-up call for Nigeria to implement reforms that will ensure local refineries are supplied with domestic crude under fair and transparent conditions.
“The current global oil price surge should serve as a clear signal: Nigeria must prioritise its domestic refining ecosystem by ensuring that local refineries are sufficiently supplied with local crude under fair and transparent terms.
“Only then can the country begin to insulate its downstream sector from global volatility, stabilise product prices, and fully realise the strategic benefits of its hydrocarbon resources,” he argued.
Source: UGC
Petrol marketers urge FG to introduce relief measures
Legit.ng earlier reported that petrol marketers asked the federal government to introduce temporary measures to ease rising petrol prices.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said higher fuel costs are increasing transport fares and the cost of goods. The group also called for food subsidies and the adoption of alternative energy sources like CNG.
The association acknowledged that global crude oil price fluctuations and market realities influence domestic fuel pricing. However, it stressed the need for immediate measures to ease the burden on citizens.
Source: Legit.ng
