Auto Journalists Association Advocates for Direct Crude Supply to Domestic Refineries
The Nigeria Auto Journalists Association (NAJA) has issued a strong appeal to President Bola Ahmed Tinubu, urging the Federal Government to prioritize the direct supply of crude oil to domestic refineries, with a particular focus on the Dangote Petroleum Refinery. This call is part of a broader strategy to address the escalating petrol prices in Nigeria, which have been exacerbated by the ongoing crisis in the Middle East and resulting global energy market volatility.
Rising Fuel Costs and Geopolitical Tensions
Amid mounting concerns over the impact of global energy market fluctuations on Nigeria's fuel costs, the association highlighted the pressure on petrol prices following escalating geopolitical tensions in the Middle East. The appeal comes shortly after the Federal Government announced plans to distribute 100,000 compressed natural gas (CNG) conversion kits nationwide, an initiative aimed at alleviating the burden of rising petrol prices on motorists and commuters by promoting alternative fuel adoption.
Balancing CNG Initiatives with Refinery Support
While NAJA described the CNG initiative as commendable, the association emphasized that strengthening local refining capacity through a reliable and direct supply of crude oil would offer a more sustainable solution to Nigeria's fuel pricing challenges. Speaking on behalf of the group, its Chairman, Theodore Opara, called on the Federal Government to implement policies that would enable domestic refineries to access crude directly from the Nigerian National Petroleum Company Limited (NNPC) in naira.
According to Opara, the current arrangement, where the Dangote Refinery imports a significant portion of its crude, leaves it vulnerable to fluctuations in the global oil market. "Dangote Refinery imports most of its crude, hence it is exposed to the effects of the ongoing crisis in the Middle East," he stated. "If the refinery gets direct crude supply from the NNPC, it will strengthen the country's long-term energy diversification strategy and reduce exposure to international supply shocks."
Addressing Nigeria's Dependence on Imported Products
Opara noted that Nigeria, despite being Africa's largest crude oil producer, still relies heavily on imported refined petroleum products, a situation that continues to expose the economy to external price volatility. "If Nigeria's major refineries, including Dangote, receive crude locally and transact in naira, the country will reduce its vulnerability to global market disruptions. It will also help stabilise the downstream petroleum sector," he added.
He further explained that while the CNG programme offers medium-term benefits, ensuring optimal operation of domestic refineries would have a more immediate impact on petrol prices. "CNG is a good transition policy for transportation, but the backbone of Nigeria's fuel supply must still come from efficient domestic refining," he asserted.
Industry Perspectives and Economic Implications
Industry observers have also argued that direct crude allocation to local refineries could ease pressure on the naira and stabilise the domestic fuel market, especially during periods of global supply disruptions. The association maintained that combining the CNG initiative with stronger support for domestic refining would provide a balanced strategy capable of shielding Nigerian motorists from the effects of international oil market volatility.
In summary, NAJA's call underscores the need for a multifaceted approach to Nigeria's energy challenges, advocating for policies that enhance local refining capabilities while supporting alternative fuel initiatives to ensure long-term stability and affordability in the fuel sector.
