Crude oil refiners under the auspices of the Crude Oil Refinery Owners Association of Nigeria (CORAN) have called for the removal of freight and insurance components from the pricing structure for crude supplied to Nigerian refineries, saying this would significantly lower feedstock costs and enable local refiners to produce petroleum products at more stable and affordable prices.
In a policy statement sent out by the Publicity Secretary, Eche Idoko, CORAN, called for the adoption of a domestic crude oil pricing framework that would allow local refineries to access crude at more realistic prices, saying such a move would help stabilise fuel costs and shield Nigerians from global oil market volatility.
The association said the proposed pricing model had become more urgent in view of growing geopolitical tensions in the Middle East, particularly involving Iran, which are already affecting global oil markets.
According to the association, adopting a pragmatic domestic pricing structure would help insulate the Nigerian economy from external shocks that often trigger spikes in the cost of refined petroleum products.
It explained that one of the key elements of the proposed framework would be the creation of a domestic crude pricing mechanism that excludes freight and maritime insurance costs, noting that locally supplied crude does not incur such charges.
The association noted that such an adjustment could significantly reduce the cost of crude feedstock for domestic refineries, making it easier for them to supply refined products to the local market at competitive prices.
