The Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, has alleged that oil producing companies diverted 500,000 barrels of crude oil daily meant for local refineries.
The association commended the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for banning the export of crude oil allocated to local refineries, adding that it would culminate in increased domestic refining.
In a statement, the Publicity Secretary of PETROAN, Joseph Obele, 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 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.”
According to him, PETROAN’s National President, Billy Gillis-Harry, tasked the NUPRC to take urgent actions against defaulters, adding that the policy would enhance the availability of petroleum products and conserve the nation’s scarce foreign exchange.
In its statement last Monday, NUPRC had stated that “In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, the Commission Chief Executive (CCE), Engr. Gbenga Komolafe reiterated that diverting crude oil meant for local refineries violates the law.
“At a meeting last weekend, attended by more than 50 critical industry players, both the refiners and producers blamed each other for the inconsistencies in the implementation of the Domestic Crude Supply Obligation (DCSO) policy. They, however, agreed that the regulator has put in place appropriate measures for effective implementation.
“While the refiners claimed that producers were not meeting supply terms and preferred to sell their crude outside, forcing them to look elsewhere for feedstock, the producers countered that refiners hardly met commercial and operational terms, forcing them to explore other markets elsewhere to avoid unnecessary operational bottlenecks.”
The regulator cautioned against any further breaches from either party, and advised refiners to adhere to international best practices in procurement and operational matters.
The Commission reminded producers not to vary the conditions stated in the DCSO policy without obtaining express permission from the CCE before selling crude outside the agreed framework. This is to avoid abuse.
Engr. Komolafe referenced Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to ensure a stable supply of crude oil to domestic refineries and strengthen the nation’s energy security, and stated that NUPRC will henceforth strictly enforce the policy regarding implementation and defaults by oil companies.
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