Crude Oil Dispute Deepens as Nigerian Refiners Reject 11 Million-Barrel Local Supply Amid Price, Quality Concerns
Nigeria’s crude oil supply dispute has taken a new twist as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed that local refiners turned down 11 million barrels of crude oil offered for domestic processing in a single month. Despite ongoing complaints from refinery owners about insufficient feedstock, data from the regulator show that crude was made available under the country’s Domestic Crude Supply Obligation (DCSO) scheme. NUPRC Chief Executive, Gbenga Komolafe, represented by Boma Atiyegoba, disclosed this during a panel session at the Crude Oil Refinery-Owners Association of Nigeria (CORAN) summit in Lagos.
Komolafe clarified that in April 2025, 48 crude cargoes were available for export, of which 21, equivalent to 21 million barrels, were earmarked for domestic refining. However, refiners lifted only 10 cargoes, leaving 11 unclaimed. He explained that the issue was not due to scarcity but largely commercial and technical challenges, such as price negotiations and crude grade specifications. “Crude oil is an international commodity. Refiners negotiate based on preferred blends and global pricing indices. The commission doesn’t interfere in pricing; it’s a willing buyer, willing seller market,” he no
According to NUPRC data, eight of the rejected cargoes were turned down due to pricing disagreements, while three others were declined because the crude grades did not meet refiners’ processing requirements. Komolafe stressed that local refiners often favor specific blends that yield higher returns, meaning they may refuse crude types that don’t align with their refining economics. Industry experts, including the Executive Secretary of the African Refiners and Distributors Association (ARDA), Anibor Kragha, advised local operators to diversify their processing capabilities to handle more crude varieties and reduce dependence on imported feedstock.
However, refinery operators strongly disagreed with the regulator’s stance. CORAN Vice-Chairman, Dolapo Okulaja, argued that local refiners are struggling to access sufficient crude despite the legal framework of the Petroleum Industry Act (PIA), which mandates domestic crude supply. “We can’t run refineries efficiently when we’re allocated less than half the crude we need. If I build a 20,000-barrel refinery and get only 10,000 barrels daily, how do I repay investors?” she questioned. Okulaja also dismissed suggestions that local refiners were “spoilt,” insisting they were adding value to Nigeria’s oil sector by refining locally rather than exporting raw crude.
Refinery owners further highlighted infrastructure deficits, particularly the absence of adequate pipeline networks, as a major constraint to crude delivery. They called for public-private collaboration to improve logistics and ensure consistent supply to modular refineries across the country. CORAN President, Momoh Oyarekhua, added that contradictions within the PIA—especially the willing buyer, willing seller clause—had complicated crude supply obligations, undermining efforts to grow Nigeria’s domestic refining capacity. “You cannot have an obligation and still condition it on commercial willingness. It defeats the purpose of the law,” he said, urging policymakers to address the legal and logistical bottlenecks slowing Nigeria’s refining ambitions.
source: punch