REFINERIES CRY OUT: Why are we importing fuel when we can produce locally?

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The Crude Oil Refinery-owners Association of Nigeria (CORAN) has criticised the oil sector regulators for their inability to meet domestic fuel supply requirements nationwide. According to CORAN, the regulators have failed to allocate sufficient crude oil to local refineries, preventing domestic refiners from reaching their full production potential.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has pegged the country’s petrol demand at 50 million litres daily. However, CORAN argued that the sole reason why local refiners were not operating at full capacity was because the government refused to allocate sufficient crude to these facilities.

“The issue is not that the domestic refineries are content with importing; it’s that the country is willing to continue importing despite the ample refining capacity we possess,” said Eche Idoko, CORAN’s Publicity Secretary. “The real question is: why are our refineries not producing? Is it because they lack the capacity? The answer is no. The issue is the regulators’ failure to address the challenges impeding these refineries from functioning optimally.

Idoko revealed that for more than six months, local refineries have not received a single barrel of crude, neither through the Domestic Crude Oil Supply Obligation (DSCO) nor any special arrangement. He emphasised that under the Petroleum Industry Act, crude producers are required to meet domestic obligations before exporting their oil, yet this has not been enforced.

“We have consistently called on the regulators to apply the same level of urgency to facilitating crude access for local refineries as they do in issuing import licenses,” Idoko noted. “The regulators have done little to enable domestic refining. Even the Dangote refinery, with its enormous capacity, has not secured the necessary arrangements with the government to lift the crude it needs.”

The CORAN spokesperson criticised the government for its lack of progress in this regard, referencing the DSCO guidelines passed last year, which have yet to result in a single refinery receiving crude under the new framework. “The document is simply unworkable,” he stated.

Idoko refrained from blaming the government directly, instead pointing the finger at the regulators, whose duty it is to ensure a functional platform for local refineries to thrive. “If the necessary mechanisms aren’t in place, it is simply not there. Producers will tell you that no framework exists under which they can supply crude to refineries.”

According to CORAN, the public should hold the NMDPRA accountable for the ongoing issues preventing local refineries from reaching their full potential. Idoko stressed the need for the NMDPRA to address key issues such as access to feedstock and establish a binding framework that would allow local refineries to meet domestic demand.

“If the NMDPRA is truly committed to improving local refining, they must ask themselves: Have they done enough to resolve the issues that are stifling local refineries?” Idoko asked. “We don’t need more rhetoric about how harmful imports are to our economy. We know that importing is not sustainable. The public needs to know why we are still importing when we can produce domestically and when it’s even cheaper to do so.”

Meanwhile, the estimated cost of landing petrol on Nigeria’s shores dropped to N928.99 per litre on Thursday. Dealers said this cost factors in various expenses, including shipping, import duties, and exchange rates.

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