Refiners blame FG for failure to meet local fuel demand
The Crude Oil Refinery-owners Association of Nigeria has slammed the oil sector sectors for the inability of CORAN members to meet the domestic fuel supply requirements nationwide.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority pegged the country’s petrol demand at 50 million litres daily.
CORAN said the regulators have failed to allocate sufficient crude oil to local refineries, preventing domestic refiners from reaching their full production potential. They accused the regulators of preferring to issue licences to import petrol.
The association’s Publicity Secretary, Eche Idoko, disclosed this during an interview with our correspondents on Thursday, expressing concern over the prolonged absence of crude oil allocation under the Domestic Crude Oil Supply Obligation framework.
He gave this reaction in response to a revelation by the NMDPRA that the country’s three operational refineries contribute less than 50 per cent of the nation’s daily petrol consumption.
The regulator said the significant shortfall was being filled by importing refined petroleum products. This was as it disclosed that Nigerians currently consume 50 million litres of petrol 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.
Idoko revealed that for more than six months, local refineries have not received a single barrel of crude, neither through the DSCO nor any special arrangement.
He further pointed out the irony in the government’s continued reliance on imports when local production capacity remains untapped due to low crude allocation.
“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,” Idoko said.
“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. We have refineries running at just 20 per cent of their installed capacity, some have not received any crude in six months. How can we expect them to meet the nation’s demand under such conditions?”
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.
The problem, he insists, lies not in the absence of crude or the unwillingness of refineries to take it, but in the lack of an effective framework for such transactions.
“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. 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,” he noted.
The CORAN spokesperson criticized 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. “If this framework is not operational, then it is of no benefit to the local refineries, and something needs to change.”
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? 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.”
Idoko also pointed to the case of Dangote Refinery, which last year made a public appeal for marketers to off-take products from its near-full storage tanks, citing the significant gap in domestic refining.
“If a refinery of that scale is facing challenges due to lack of crude supply, then why are the regulators still claiming that our refining capacity is underperforming? These refineries have been asking for crude for over two years,” he added.
In a scathing critique of the government’s handling of the sector, Idoko called on the public to demand transparency.
“The regulators must provide a full report on the last refinery to receive a litre of crude. Our members have not received any crude for the last six months. How can they be expected to produce without the raw materials they need?”
While acknowledging that refineries have not been stopped from obtaining licenses, Idoko insisted that there must be fair competition. “Let it be a level playing field for everyone. If the regulators have been supplying crude to local refineries, let them publish the quantities and charts showing what has been supplied. Without this transparency, the claim that local refineries are underperforming is baseless.”
Petrol landing cost
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.
According to the latest competency centre daily energy data released by the Major Energies Marketers Association of Nigeria on Thursday, the on-spot estimated import parity into tanks was N928.99 per litre at the ASPM terminal, an increase of N1 from the N927.27 per litre quoted on Friday, February 7, 2025. (The last data posted on the cost of landing imported petrol).
At the NPSC terminal, it was priced at N929.05 per litre. The document also noted that the average cost for 30 days rose to N969.94 per litre, up from N938.67 per litre on February 7.
The document stated that the price of Brent crude was benchmarked at $75.84 per barrel, with an exchange rate of N1,507.22 per dollar.
