According to the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), oil producers are allegedly stealing 500,000 barrels of crude oil that are intended for local refineries every day.
The Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) decision to prohibit the export of crude oil allotted to domestic refineries was praised by the association.
The move is anticipated to lessen the strain on the foreign exchange supply, increase local refining capacity, and decrease the importation of refined petroleum products, according to PETROAN.
PETROAN claims that because oil producers have not complied with the domestic crude supply duty, numerous refineries have been shut down.
Joseph Obele, the association’s publicity secretary, accused the oil producers of racketeering in a statement, claiming that they put their short-term financial gains ahead of the government’s attempts to increase local refining capacity.
The closure of local refineries is a result of the exports of crude oil intended for domestic refinement.
A significant racketeering operation has been in place, with manufacturers and traders giving priority to rapid foreign exchange profits above domestic refinement.
The merchants stated, “Around 500,000 barrels of crude oil are allotted for domestic refining each day, but these volumes frequently find their way to the international market.”
PETROAN insisted that the prohibition is anticipated to benefit the economy since domestic crude oil refinement will boost the petrochemical and agricultural sectors, lessen income disparities, and allow Nigeria to advance from supplying raw materials to supplying value-added products.
The National President of PETROAN, Billy Gillis-Harry, called on the NUPRC to act quickly to punish refineries, cargo ships, and businesses that violate this rule.
Harry thinks the policy will ensure that there are enough refined petroleum products in the nation, which will lower prices and give Nigerian consumers better futures.
More than 50 important industry participants attended a stakeholders meeting last weekend when it was learnt that producers and refiners shared blame for inconsistent execution of the domestic crude supply obligation.
To prevent operational bottlenecks, oil producers reportedly claimed that refiners rarely meet commercial and operational criteria, forcing them to look for other markets.
As a result, refiners had to look for other feedstock sources since they said producers were not meeting supply agreements and instead wanted to ship oil overseas.
There was a protracted conflict between local refineries and crude producers as a result of the Dangote refinery’s months-long struggles with crude.
Alhaji Aliko Dangote, the president of the Dangote Group, complained that foreign oil corporations were sabotaging his refinery by refusing to deliver petroleum because they prioritised Asian nations.
During that period, the NUPRC directed the upstream participants to provide crude to Dangote and other nearby refineries.
As a caution against being compelled to supply crude oil to the Dangote refinery and other nearby ones in Nigeria, oil producers operating under the auspices of the Independent Petroleum Producers Group declined.
