\n\nFG Moves to Cut Refining Costs as Nigeria Reviews Crude Supply Rules for Dangote, Other Refineries
The Federal Government is considering major changes to Nigeria’s crude oil supply and pricing policies in a move aimed at improving access to crude for domestic refineries, including the Dangote Refinery.
The proposed reforms are expected to reduce the cost of crude supplied to local refineries and make domestic refining more competitive. According to Reuters, the current system can add about $3–$4 per barrel to refining costs because of the involvement of middlemen in crude supply arrangements.
One proposal under consideration would allow oil producers linked to international oil companies to supply crude directly to nearby Nigerian refineries. Another option would provide discounts for refiners that collect crude directly from production sites, reflecting savings on transportation and handling costs.
The development comes as Nigeria continues efforts to strengthen its domestic refining capacity and reduce dependence on imported petroleum products.
The Nigerian Upstream Regulatory Commission (NUPRC) also reported significant improvement in compliance with domestic crude supply obligations. Compliance has reportedly risen to more than 90 per cent, compared with below 43 per cent previously.
Industry stakeholders believe that improving access to competitively priced crude could help Nigerian refineries operate more efficiently, potentially supporting greater domestic fuel production and reducing pressure from imported petroleum products.
However, discussions are still ongoing, with issues including crude quality and the appropriate pricing mechanism yet to be fully resolved.
