International Oil Companies operating in Nigeria are bypassing direct crude oil supply to local refineries despite an estimated 60 million barrels of stranded Nigerian crude floating on the high seas. This disconnect is exacerbating Nigeria’s struggle to boost domestic refining capacity and maximize oil revenues.
Despite binding provisions under Nigeria’s Petroleum Industry Act requiring producers to sell crude oil to Nigerian refineries, IOCs are prioritizing foreign oil traders who then resell the same crude to Nigeria at premiums of $5-6 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. This is nothing but a coordinated effort to undermine the survival of Nigerian refineries,” said Bimbo Oyarinu, a public affairs analyst.
The Nigerian Upstream Petroleum Regulatory Commission has issued warnings to oil firms that crude designated for domestic refining must not be exported, but industry sources claim the practice continues unabated. Meanwhile, Nigerian refineries, including the massive Dangote Petroleum Refinery, are being forced to import crude oil at considerable expense to keep running.
Source: Leadership Ng
