More than 60 million barrels of Nigerian crude oil are reportedly floating unsold in international waters while domestic refineries face critical supply shortages, according to documents obtained by Daily Trust. This situation persists despite explicit warnings from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) prohibiting the export of crude designated for domestic refineries.
NUPRC Chief Executive Gbenga Komolafe stated in a February letter that “The diversion of crude cargo designated for domestic refineries is a contravention of the law,” adding that the Commission would “henceforth disallow export permits for such cargoes.”
Under Nigeria’s Petroleum Industry Act, the Domestic Crude Supply Obligations require producers to sell crude oil to Nigerian refineries to ensure adequate feedstock for domestic refining. However, industry sources allege these requirements are being systematically circumvented, with oil firms selling to foreign traders who then resell the same crude to Nigeria at premiums of $5 to $6 per barrel above global benchmarks.
“IOCs offer crude to local refineries at a significantly higher premium compared to the prices they charge in other international markets,” said public affairs analyst Bimbo Oyarinu. “This is nothing but a coordinated effort to undermine the survival of Nigerian refineries.”
The Crude Oil Refinery-owners Association of Nigeria (CORAN) has repeatedly questioned regulators’ inability to ensure sufficient crude allocation to local refineries. CORAN’s National Publicity Secretary, Eche Idoko, recently stated that crude supply shortages have stalled progress at at least seven refineries, with many modular refineries not having refined “a single litre in the last six to eight months.”
Even the Dangote refinery has resorted to importing crude from the United States, Angola, and Algeria as local supply remains inadequate. Oil and gas expert Dr. Ayodele Oni attributes the reluctance to supply Nigerian refineries to IOCs’ preference for dollar payments rather than naira due to currency fluctuations, potentially leading to higher prices for refined products due to scarcity or more expensive supply from international traders.
Source: Daily Trust
