The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has made a shocking revelation, accusing oil producers of diverting 500,000 barrels of crude oil daily—a volume originally allocated for local refineries.
This alarming claim exposes the rampant disregard for the domestic crude supply obligation, which has led to the abandonment of several local refineries. PETROAN argues that instead of refining crude oil within Nigeria, oil producers and traders prioritize quick foreign exchange earnings by exporting crude meant for local consumption.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has recently banned the export of crude oil allocated to local refineries, a move that PETROAN believes will have far-reaching positive impacts on Nigeria’s economy.
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With crude oil staying in Nigeria, refineries will operate at higher capacities, reducing reliance on expensive imports. Locally refined crude will provide raw materials for various industries, enhancing productivity. Keeping the value chain within Nigeria ensures that more citizens benefit financially, rather than foreign traders. Nigeria spends billions on importing refined petroleum; local refining will stabilize the Naira by reducing forex demand.
PETROAN’s National President, Billy Gillis-Harry, has urged the NUPRC to take decisive action against defaulting refineries, cargo vessels, and companies involved in the illegal diversion. He insists that enforcing this policy will guarantee a steady supply of refined petroleum, leading to lower fuel prices and economic relief for Nigerians.
Reacting to these alarming revelations, the NUPRC’s Commission Chief Executive, Gbenga Komolafe, issued a strict warning to oil producers. In a circular to exploration and production companies, he declared that any diversion of crude oil meant for local refining is illegal and will lead to immediate denial of export permits.
“All cargoes designated for domestic refining can only be altered with the express approval of the Commission Chief Executive. Any violation will attract serious consequences,” the letter read.
With the Nigerian government tightening regulations, stakeholders are hopeful that this crackdown will finally put an end to crude oil racketeering, revive abandoned refineries, and usher in a new era of economic transformation powered by local refining and industrial growth.
