Despite legal obligations under Nigeria’s Petroleum Industry Act (PIA), international oil companies (IOCs) continue to bypass direct supply of crude oil to local refineries, opting instead to sell to foreign traders. This has left over 60 million barrels of Nigerian crude stranded at sea, unsold, and unavailable to domestic refiners like Dangote Petroleum Refinery. These actions, experts say, not only hurt national energy security but also expose a pattern of economic sabotage at the expense of Nigeria’s industrial development.
Under the PIA, producers are mandated to fulfill Domestic Crude Supply Obligations (DCSO), ensuring Nigerian refineries have adequate access to crude feedstock. However, IOCs reportedly prefer selling to foreign buyers—mainly in Asia and the Mediterranean—who then resell the same oil to Nigeria at a $5–$6 premium per barrel. This maneuver effectively prices local refineries out of their own market, and contributes to the country’s ballooning fuel import bill despite having one of Africa’s largest oil reserves.
Critics blame weak regulatory enforcement by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which has so far failed to impose meaningful penalties. While the Commission has issued warnings and threatened to revoke export permits, oil firms reportedly continue their practices unchecked. Some insiders allege corruption and backroom deals are undermining the regulator’s mandate, allowing foreign interests to dominate a market that should be fueling domestic growth.
As a result, refineries like Dangote and others in Edo and Rivers states are either importing crude at high cost or halting operations entirely. The Crude Oil Refinery-owners Association of Nigeria (CORAN) says at least seven projects have stalled due to feedstock shortages. Meanwhile, over $8.5 billion may be spent on crude imports in the next six months alone—an irony not lost on industry analysts, who argue that local production should feed local needs first. Without urgent reforms, Nigeria risks turning its refining revolution into yet another missed opportunity.
Source: Leadership