The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has expressed worry that oil producers are diverting roughly 500,000 barrels of crude oil per day that were initially intended for domestic refineries, to overseas markets.
Nigeria becomes more reliant on imported refined petroleum products as a result of this approach, which also undercuts domestic refining efforts.
In response, the export of crude oil intended for domestic refineries has been outlawed by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The NUPRC highlighted that any adjustments to these allocations require direct permission from its Chief Executive, intending to enhance domestic refining capacity and alleviate strain on foreign exchange reserves.
This situation has led to disputes between oil producers and refiners. According to producers, refiners frequently fall short of operational and commercial standards, which forces them to look for other markets.
On the other hand, refiners contend that producers are breaking supply contracts, forcing them to look for alternative crude suppliers.
Billy Gillis-Harry, National President of PETROAN, has demanded that the NUPRC’s ban be strictly enforced and that anyone who violates it be dealt with immediately. He thinks that following this directive will guarantee Nigeria has enough refined petroleum products, which will lower prices and benefit consumers.
The NUPRC has warned that any company found diverting crude oil meant for domestic use will face regulatory actions, including the potential revocation of their oil exploration, production, and export permits.
This move aligns with the government’s ‘Naira-for-Crude’ initiative, which aims to supply domestic refineries with crude oil in exchange for naira, thereby strengthening the local currency and ensuring adequate fuel supply within the country.
