Despite an increase in Nigeria’s oil production, domestic refiners, including modular refineries, are facing a lack of access to crude oil. This has led to challenges for local refineries, limiting their ability to operate at full capacity and contribute effectively to the energy sector.
The Crude Oil Refinery-owners Association of Nigeria has raised concerns about the prioritization of crude supply to domestic refiners over exports. They highlighted that many local refiners have not received any crude oil allocations for months under the Domestic Crude Oil Supply Obligation framework.
Industry experts noted that a significant amount of crude oil meant for domestic refining is being diverted to the international market, affecting the local refineries’ operations. To address this issue, the Nigerian Upstream Petroleum Regulatory Commission has banned the export of crude oil intended for domestic refineries.
The commission emphasized the importance of adhering to regulations and ensuring that crude oil meant for local refineries is not diverted. Despite these measures, challenges persist, and domestic producers are calling for more support from the government.
The national officer of the association urged the government to focus on supporting local refineries, particularly modular refineries, to enhance the development of the local petroleum industry. The association also highlighted the refining requirements of various domestic refineries to emphasize the need for consistent crude oil supply.
Efforts are being made to increase the capacity of domestic refineries and reduce the importation of refined petroleum products. The ban on the export of crude oil allocated to local refineries is seen as a positive step towards boosting local refining capacity and easing foreign exchange pressures.