The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns over the diversion of crude oil meant for domestic refineries to the international market. The association noted that this practice has significantly hindered local refining efforts and contributed to Nigeria’s ongoing petroleum supply challenges.
In a statement, PETROAN’s Publicity Secretary, Joseph Obele, pointed out that oil producers and traders often prioritize selling crude abroad for quick foreign exchange rather than supplying it to local refineries. He stated, “The exportation of crude oil meant for domestic refining has led to the abandonment of local refineries. It has been a major racketeering scheme, with producers and traders prioritizing quick foreign exchange proceeds over local refining.”
Obele further noted that around 500,000 barrels per day (bpd) are allocated for domestic refining, but a significant portion of this volume is exported instead. This, he said, has contributed to the struggles of local refineries, forcing them to seek alternative crude sources.
To address this issue, PETROAN’s National President, Billy Gillis-Harry, called on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to take immediate action against those violating the policy. He noted that ensuring compliance would improve the availability of petroleum products and reduce the country’s dependence on imported fuel, thereby conserving foreign exchange.
Last Monday, the NUPRC reaffirmed its stance against the illegal export of crude meant for local refining. The Commission stated that in a letter dated February 2, 2025, its Chief Executive, Engr. Gbenga Komolafe, reminded exploration and production companies that diverting such crude violates the law.
At a recent industry meeting attended by more than 50 key players, refiners and producers blamed each other for failing to adhere to the Domestic Crude Supply Obligation (DCSO) policy. Refiners claimed that producers were not meeting supply agreements, which forced them to look elsewhere for crude. Meanwhile, producers argued that refiners struggled to meet commercial and operational requirements, pushing them to sell their crude elsewhere to avoid operational challenges.
In response, NUPRC warned both parties against further violations and urged refiners to follow international best practices in crude procurement. The Commission also reminded producers that they must not alter the conditions of the DCSO policy without prior approval from the Chief Executive. This measure, it stated, is necessary to prevent abuse of the system.
Engr. Komolafe cited Section 109 of the Petroleum Industry Act (PIA) 2021, which is designed to ensure a steady supply of crude to domestic refineries and bolster Nigeria’s energy security. He assured that the NUPRC will strictly enforce the policy to hold oil companies accountable for any violations.
