The price of diesel is approaching N2,000 per litre, raising concerns over higher operating costs for manufacturers, farmers, transporters, telecommunications companies and other businesses that depend heavily on the product.
The Crude Oil Refinery Owners Association of Nigeria (CORAN) has therefore called on the Federal Government to urgently intervene, warning that sustained increases in diesel prices could worsen production costs, food inflation and the cost-of-living crisis.
In a statement on Tuesday, CORAN’s Publicity Secretary, Eche Idoko, said diesel remained an important fuel for factories, farms, transportation, telecommunications and businesses.
He said the government needed to strengthen domestic refining rather than rely heavily on imported petroleum products.
Diesel Nears N2,000/Litre Despite Refinery Expansion
CORAN said Dangote refinery produced about 19.1 million litres of diesel daily in July, while Nigeria’s modular refineries have an estimated combined installed capacity of about 35,000 barrels per day.
According to the association, the modular refineries could produce between 2.2 million and 2.8 million litres of diesel daily if they operate at full capacity.
This would put potential domestic diesel production from Dangote and modular refineries at between 21 million and 22 million litres per day.
However, Nigeria continued to import diesel despite the increased refining capacity.
CORAN said national diesel consumption was about 14.7 million litres per day in July, while the country imported approximately 244.9 million litres during the month.
Refiners Blame Crude Supply Constraints
CORAN said the immediate priority should be ensuring that Nigerian refineries have adequate and predictable access to crude oil.
The association called on the Presidential Committee on Naira-for-Crude to increase and guarantee crude supplies to the Dangote refinery while extending the arrangement to modular refineries.
It also urged the government to establish commercially sustainable crude supply arrangements that would allow domestic refineries to operate closer to their installed capacities.
The association argued that increasing domestic diesel production would reduce Nigeria’s exposure to foreign exchange pressures, international freight costs and external market shocks.
The call comes as crude production itself remains an important constraint for Nigeria’s refining ambitions. NNPC Limited reported that crude oil and condensate production fell to 1.68 million barrels per day in July, from 1.72 million barrels per day in June.
CORAN said the current situation should therefore be treated as an economic issue rather than merely a downstream petroleum-market concern.
“Energy-sector reforms must wear a human face,” the association said.
“Give Dangote the crude it requires. Give modular refineries access to naira-for-crude. Let Nigerian crude power Nigerian industry.”
The challenge for Nigeria is increasingly shifting from simply building refining capacity to ensuring that existing refineries have sufficient crude and can operate commercially at high utilisation levels.