Oil Producers Allegedly Selling Crude Abroad Despite Local Refining Needs
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns over the alleged diversion of 500,000 barrels per day (bpd) of crude oil designated for local refining.
The association commended the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for imposing a ban on exporting crude allocated to domestic refineries.
PETROAN believes this decision will boost local refining, reduce petroleum imports, and ease forex pressure on the economy.
According to PETROAN, oil producers have failed to meet their domestic crude supply obligations, leading to the abandonment of many local refineries.
In a statement, the association’s Publicity Secretary, Joseph Obele, accused producers of prioritizing quick dollar earnings over strengthening Nigeria’s refining sector.
> “The crude oil meant for domestic refining is being exported, leading to the neglect of local refineries.
Producers and traders prefer quick foreign exchange gains over supporting Nigeria’s refining industry,” PETROAN stated.
Call for Action Against Defaulting Companies
PETROAN’s National President, Billy Gillis-Harry, urged the NUPRC to sanction refineries, cargo vessels, and oil firms that violate this policy. He emphasized that prioritizing local refining would:
Strengthen petrochemical and agricultural industries
Reduce income inequality
Position Nigeria as a supplier of refined products rather than just crude oil
At a recent stakeholders’ meeting, refiners and producers traded blame over the crude supply crisis.
While oil companies argued that refiners fail to meet commercial terms, local refiners accused producers of deliberately selling crude abroad, forcing them to seek alternative feedstock.
Dangote Refinery Faces Crude Supply Challenges
When Dangote Refinery commenced operations, it struggled with crude shortages.
Dangote Group President, Alhaji Aliko Dangote, accused international oil firms of prioritizing crude exports to Asian markets, thereby undermining local refineries.
In response, President Bola Tinubu intervened, mandating that crude oil designated for local refineries be supplied to Dangote and other domestic processors.
However, reports indicate that the naira-for-crude deal, introduced in October 2024, has not fully resolved the supply issues.
Despite the challenges, Dangote Refinery is expecting a fresh delivery of 12 million barrels of crude oil from the United States this month to sustain its operations.
Conclusion
The dispute over crude allocation highlights ongoing struggles between producers and refiners in Nigeria’s oil sector.
While the government is pushing for increased local refining, enforcement of policies and commercial agreements remains a challenge.
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