By Obinna Uballa
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that 11 crude oil cargoes offered to local refiners in one month were rejected, despite repeated complaints of feedstock shortages by refinery operators.
NUPRC Chief Executive, Gbenga Komolafe, who was represented by Boma Atiyegoba during a panel session at the Crude Oil Refinery-Owners Association of Nigeria (CORAN) summit held recently in Lagos, disclosed that the crude was made available under the Domestic Crude Supply Obligation (DCSO).
Komolafe, according to Punch Newspaper, noted that while local refiners – including the 650,000 barrels per day Dangote Refinery – have consistently decried crude scarcity, data from the commission shows that crude allocations were provided but largely declined by the refiners.
“In April alone, 48 cargoes were available for export, out of which 21 were reserved for local refining. However, only 10 were lifted. Eleven cargoes were not taken up,” Komolafe said.
He explained that eight of the unclaimed cargoes were rejected due to pricing disputes, while three were turned down based on crude grade specifications.
“It’s largely a commercial and technical issue. Refiners have preferred blends that yield certain products. Even if the crude is available, if it doesn’t fit their refining economics, they won’t take it,” he added.
Komolafe maintained that the commission was ensuring compliance with the DCSO policy but would not interfere in commercial negotiations between crude producers and refiners.
“We operate under a willing buyer, willing seller framework. The commission won’t fix prices, the market must determine that,” he stressed.
However, refinery owners have faulted the commission’s position, insisting that the government has failed to guarantee sufficient feedstock for domestic processing despite the Petroleum Industry Act’s (PIA) provisions.
Vice Chairman of CORAN, Mrs. Dolapo Okulaja, lamented that most modular refineries receive only a fraction of their required crude volumes.
“I cannot set up a 20,000-barrel refinery and get only 5,000 barrels per day. How do I repay investors? The reality is that most refiners aren’t getting enough crude to operate efficiently,” she said.
Okulaja also dismissed claims that refiners were “spoilt,” arguing that many were struggling under poor infrastructure and high logistics costs.
“We’re not pampered. We’re adding value by refining crude locally. But we can’t be expected to move crude by truck, we need pipelines and real infrastructure,” she said.
CORAN President, Momoh Oyarekhua, also faulted the PIA’s implementation, describing the “willing buyer, willing seller” clause as a contradiction to the Domestic Crude Supply Obligation.
“You can’t impose an obligation and then condition it with market discretion. That’s the clog in the wheel of local refining,” he stated.
Executive Secretary of the African Refiners and Distributors Association, Anibor Kragha, advised Nigerian refiners to expand their crude-processing capacity to accommodate more blends, arguing that reliance on a narrow range of crude types limits refinery productivity.
“Our refiners are too rigid. They must diversify their crude slates. That’s the only way Nigeria can refine more locally and still meet its OPEC quota,” Kragha said.
