Local refiners under the umbrella of the Crude Oil Refinery Owners Association of Nigeria have raised concerns over the diversion of crude oil allocated for domestic refining, warning that inconsistent deliveries are undermining plant utilisation, financing, and Nigeria’s energy security.
The CORAN Board of Trustees Chairman, Emmanuel Ihenacho, stated this during a courtesy visit to the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Oritsemeyiwa Eyesan, yesterday. Ihenacho said the gap between crude allocation and actual delivery continues to weaken local refining efforts, despite policy provisions designed to prioritise domestic supply.
According to him, data showed that 483,000 barrels are often allocated to domestic refineries, but only a fraction gets to the local refineries. The rest, he argued, is due to operational constraints, re-trading, or flexibility provisions, adding that the diverted barrels represent lost jobs, lost value, and lost opportunities for Nigeria.
He acknowledged ongoing reforms in the upstream sector and noted that domestic crude supply obligations were beginning to feature in planning. However, Ihenacho stressed that allocations alone were insufficient if volumes did not consistently reach local refineries, adding that erratic feedstock supply was leaving operational plants underutilised.
“We stand before you today as partners in execution — the downstream arm of Section 109 of the PIA. When crude is allocated for domestic refining, we are the ones who translate that allocation into petrol in Ibadan, diesel in Kano, and aviation fuel at MMIA. When you secure crude at the wellhead and terminal, we ensure that value is retained within Nigeria’s economy.
“However, madam Chief Executive, as you are fully aware, allocation does not always translate to delivery. And a license does not automatically translate to production. That gap between policy and product is why we are here today. Permit me to respectfully highlight the realities as experienced by your downstream partners: “First, DCSO compliance remains suboptimal.
Data indicate that of the 483,000 barrels per day allocated, only a fraction consistently reaches domestic refineries. The rest is lost to operational constraints, re-trading, or flexibility provisions. Each diverted barrel represents lost jobs, lost value, and lost opportunity for Nigeria,” he stated.
The CORAN chairman noted that several modular and mid-scale refineries remain functional but cannot run at optimal levels because crude deliveries are inconsistent. He warned that unstable supply undermines financing arrangements, weakens workforce confidence, and affects host communities that depend on refinery operations.
“Our members: Edo Refinery, Duport/Pulon, OPAC, among others, remain operational but underutilised due to inconsistent supply. A refinery cannot be sustained on erratic feedstock. Without stability, financing weakens, workforce morale declines, and community expectations are unmet,” he said.
Beyond supply concerns, he highlighted pricing challenges, explaining that current frameworks linked to international benchmarks do not reflect the realities of domestic refining. According to him, refiners require a predictable and transparent pricing structure capable of supporting long-term planning and attracting financing.