The Federal Government of Nigeria has called on crude oil producers and domestic refiners to end their infighting, warning that the country's energy security depends on their collaboration. Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, delivered this message at the 3rd Nigerian Oil Refining Summit 2026, organised by the Crude Oil Refinery Owners Association of Nigeria (CORAN). The summit's theme was "Refining for Value: Linking Upstream Supply to Downstream Demand".
Lokpobiri, represented by his Technical Adviser, Mr Umar Gwandu, emphasised that Nigeria can no longer afford to view crude production, refining, and petroleum-product consumption as separate segments. He stressed that they are interconnected parts of one value chain. The Minister outlined the government's policy priorities, including securing reliable feedstock, balancing commercial interests, and de-risking investment. He noted that a refinery cannot operate without crude and that government's position is clear: production must increasingly support domestic value addition while remaining commercially sustainable for investors.
The Minister highlighted Section 109 of the Petroleum Industry Act (PIA), which provides for the Domestic Crude Supply Obligation (DCSO). This policy empowers the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to enforce the supply of crude to domestic refineries. Lokpobiri disclosed that NUPRC has developed the DCSO framework in consultation with stakeholders and expects it to evolve into a reliable, transparent, and bankable supply system. He defended the Naira-for-Crude initiative, designed to supply crude to local refineries in local currency, reducing foreign-exchange pressure and creating predictability.
Lokpobiri urged crude oil producers and refiners to work together, citing the need for sustainable refining. He warned that Nigeria cannot achieve sustainable refining by treating upstream producers and domestic refiners as opposing sides. The Minister emphasised that the willing-buyer, willing-seller principle remains fundamental, but DCSO provides the regulatory tool for national energy security. He called for transparent, long-term bankable contracts that give refiners certainty and preserve incentives for producers.
The Minister stressed that building refineries requires huge capital, and investors need to be assured of a predictable and stable regulatory environment. He noted that capital is mobile and that investors will compare Nigeria with competing jurisdictions. Lokpobiri urged regulators to enforce rules without unnecessarily determining commercial outcomes and to respect properly executed agreements. He also called for mobilisation of patient capital from development finance institutions, export credit agencies, and private investors.
Lokpobiri welcomed the new Africa Energy Bank as a strategic partner for refining and petrochemicals infrastructure development. He outlined the Federal Government's Refining Policy Compact, which includes strengthening DCSO, encouraging balanced commercial arrangements, and mobilising domestic and international capital. The Minister emphasised that government's role is to establish a level, transparent, and predictable playing field, not to predetermine commercial winners.
The Minister concluded by urging Nigeria to capture more value from every barrel produced, moving from crude abundance to refining capacity and from policy intent to measurable delivery. He commended CORAN for sustaining dialogue on transforming crude resources into domestic value. The Federal Government's warning to refiners and producers comes as the country seeks to increase its refining capacity and reduce dependence on imported petroleum products.
Key points
- The Nigerian government has warned crude oil producers and refiners to end their infighting.
- The government is committed to the Naira-for-Crude policy, designed to supply crude to local refineries in local currency.
- The government aims to establish a reliable framework for crude oil supply to domestic refineries, citing the need for energy security.
