Diesel nears N2,000 as refinery owners demand urgent government action
By Aboki Forex —
The Crude Oil Refinery Owners Association of Nigeria, CORAN, has asked the Federal Government to intervene as diesel prices approach N2,000 per litre. The association warned that the development could worsen production costs, food inflation and the cost-of-living crisis.
CORAN issued the warning in a statement on Tuesday signed by its Publicity Secretary, Eche Idoko. It said Nigerians should be concerned because diesel is a major fuel for factories, farms, transportation, telecommunications and businesses.
Higher costs for factories, farms and transport
The association said sustained increases in diesel prices would have severe consequences for the economy. These include higher production and transportation costs, worsening food inflation and additional pressure on manufacturers.
CORAN argued that the solution is to strengthen all Nigerian refineries, including the Dangote Petroleum Refinery and modular refineries operating across the country. It said the issue should not be seen as a contest between Dangote and modular refineries, stressing that Dangote is also a local refinery and a national asset that needs adequate and predictable domestic crude supply.
Nigeria’s local refining potential
According to CORAN, existing modular refineries have an estimated installed capacity of about 35,000 barrels per day. They could produce between 2.2 million and 2.8 million litres of diesel daily if they operate at full capacity, depending on their configurations and product yields.
The Dangote refinery reportedly produced about 19.1 million litres of diesel daily in July. CORAN said combined potential output from large and modular refineries could take domestic diesel production to between 21 million and 22 million litres per day.
Reported national diesel consumption stood at about 14.7 million litres per day in July. Nigeria still imported about 244.9 million litres of diesel during the month. CORAN said the situation shows urgent measures are needed to increase domestic refining and reduce dependence on imported petroleum products.
CORAN’s demands to the government
CORAN called on the Presidential Committee on Naira-for-Crude to increase and guarantee adequate crude supply to the Dangote refinery. It also asked the government to extend the Naira-for-Crude arrangement to existing modular refineries.
The association urged the government to create commercially sustainable crude supply arrangements that would enable Nigerian refineries to operate closer to their installed capacities. It said increasing local diesel production would reduce Nigeria’s exposure to imported products, foreign exchange pressures, international freight costs and external market shocks.
“Energy-sector reforms must wear a human face. At a time when Nigerians are struggling with inflation and businesses are fighting to survive, we must go beyond paying lip service to local refining,” CORAN said.
“Give Dangote the crude it requires. Give modular refineries access to naira-for-crude. Let Nigerian crude power Nigerian industry. Nigeria produces crude oil. Nigerians must begin to feel the advantage of being an oil-producing nation.”
What this means for the naira and consumers
Rising diesel prices put direct pressure on the naira by increasing demand for foreign exchange to finance imports. For consumers and businesses, higher diesel costs mean more expensive transport, food and goods, while manufacturers face shrinking margins and may pass costs to buyers.