PETROAN Accuses Oil Producers of Exporting Crude Allocated for Local Refineries

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has accused oil producers of diverting 500,000 barrels of crude oil meant for local refining to the international market.

The association raised the allegation while commending the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for banning the export of crude allocated to local refineries.

PETROAN said the move would strengthen domestic refining capacity, reduce reliance on imported petroleum products and ease pressure on foreign exchange reserves.

In a statement by its Publicity Secretary, Joseph Obele, the association described the exportation of domestic crude oil as a long-standing racketeering scheme, blaming producers for prioritizing quick foreign exchange earnings over the government’s effort to boost local refining capacity.

“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 prioritising quick foreign exchange proceeds over local refining.

“Approximately, 500,000 barrels of crude oil per day are allocated for domestic refining, but these volumes often find their way to the international market,” PETROAN stated.

The association further stated that NUPRC’s intervention was necessary to restore accountability in crude supply distribution and ensure local refineries have sufficient feedstock for operations.

PETROAN’s National President, Billy Gillis-Harry, called on the NUPRC to take swift action against refineries, cargo vessels and oil firms violating the policy, stressing that its implementation would guarantee adequate petroleum products, stabilize fuel prices and provide economic relief to Nigerian consumers.

However, the issue of domestic crude supply obligations has remained a contentious subject among industry players. At a recent stakeholders’ meeting attended by over 50 key players, refiners and producers traded blame over inconsistencies in implementing domestic crude supply agreements.

Oil producers argued that refiners often fail to meet commercial and operational requirements, forcing them to seek alternative buyers to avoid operational bottlenecks.

Refiners, however, accused producers of ignoring supply commitments in favor of exporting crude abroad for higher returns.

The Dangote Refinery has faced similar challenges in securing adequate crude supplies.

At the time, Aliko Dangote, President of Dangote Group, accused international oil companies of prioritizing crude sales to Asian markets.

The NUPRC later intervened, directing upstream producers to allocate crude to Dangote and other local refineries, but the implementation has remained inconsistent.

Despite President Bola Tinubu’s directive for crude producers to prioritize local refiners under a naira-for-crude deal, reports indicate that local refineries continue to face supply constraints.

The Dangote Refinery is reportedly expecting 12 million barrels of crude oil from the United States this month.

With the NUPRC’s recent ban on exporting crude meant for local refineries, PETROAN is urging strict enforcement to curb diversion and ensure domestic refineries receive uninterrupted crude supply. Industry stakeholders are closely monitoring the policy’s implementation to determine its effectiveness in stabilizing the country’s petroleum supply chain.