Federal Government considers crude oil discounts and direct supply to refineries

The Crude Oil Refinery-owners Association of Nigeria CORAN stated that these proposals include allowing producers to deliver crude directly to nearby refineries and offering refiners a discount on transportation and handling costs embedded in crude prices. These measures are expected to be discussed at an upcoming meeting involving the government, the Nigerian Upstream Petroleum Regulatory Commission, domestic refiners, and crude oil producers. The review follows improved compliance with the domestic crude supply framework in the second quarter of 2026, despite refiners' ongoing concerns about the high cost of locally sourced feedstock.

CORAN spokesperson Eche Idoko explained that direct delivery would reduce reliance on trunklines and lower logistics costs, while a freight discount would address situations where refiners do not incur certain transport and handling expenses. Local refiners, including Dangote Refinery, have previously noted that Nigeria's pricing structure can add $3 to $4 per barrel to their crude costs due to transactions often being routed through producers' trading arms. A senior NUPRC official confirmed these proposals are under consideration, particularly due to pressure from inland refineries, but noted that implementation would require resolving issues relat