Refiners, Crude Producers Clash Over Zero Allocation.

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Nigeria’s domestic refiners, including modular refineries, are facing significant challenges due to zero allocation of crude oil, despite the country’s oil output rising to over 1.4 million barrels per day. As a result, refinery owners are urging the Federal Government to prioritise crude supply to domestic refiners over exports.

“We have resorted to private arrangements to source for products. This process has been herculean, forcing most of the modular refineries to produce below full capacity,” said the Crude Oil Refinery-owners Association of Nigeria (CORAN) publicity secretary. “So we consider the directive by the NUPRC quite heartwarming, and we hope the IOCs will be cooperative.”

The CORAN publicity secretary also expressed concerns that none of the modular refineries have benefitted from the Naira for crude initiative and that more incentives are given to refined petroleum importers than to domestic producers. “We tend to have seen more incentives to refined petroleum importers than CORAN members who are investing heavily in the economy and helping our naira against foreign exchange,” he said.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has disclosed that eight domestic refineries, including the Dangote Petroleum Refinery, require 770,500 barrels of crude equivalent per day for processing in the first half of 2025. The commission aims to ensure consistent supply of crude oil to domestic refineries, which will help boost local refining capacity and reduce importation of refined petroleum products.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has commended the NUPRC for banning the export of crude oil allocated to local refineries, saying it will ease pressure on foreign exchange supply. However, efforts to get oil producers to comment on the development were unsuccessful.

The national officer of CORAN has urged President Bola Tinubu and his economic team to focus on supporting domestic producers, particularly modular refineries. “We are appealing to Mr. President and the government’s economic team to please give attention to local refineries, especially modular refineries,” he said.

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