NUPRC: 11 Crude Cargoes Rejected by Local Refiners Despite Supply Availability

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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that 11 crude oil cargoes offered to local refiners in a single month were not taken up, despite repeated complaints by refinery operators about shortages of feedstock.

The Chief Executive of the NUPRC, Gbenga Komolafe, disclosed this at the Crude Oil Refinery-Owners Association of Nigeria (CORAN) Summit held recently in Lagos. Komolafe, who was represented by Boma Atiyegoba, explained that records from the commission showed crude oil was made available to refiners under the Domestic Crude Supply Obligation (DCSO) scheme.

Refiners Decline 11 Cargoes Over Pricing, Grade Preferences

Komolafe noted that although refineries had raised concerns over limited feedstock, available data indicated that crude allocations were not being fully utilised.

Using April as a reference point, he said:

“In April, 48 crude cargoes were available for Nigeria’s exports. Of those, 21 were reserved for DCSO, amounting to 21 million barrels of oil. Out of the 21 cargoes, only 10 were lifted, while 11 were left untaken.”

He clarified that the reasons for the unclaimed cargoes were largely commercial and technical, rather than due to unavailability of crude.

“Eight of the cargoes were rejected due to pricing differences, while three were declined based on crude grade specifications. Refiners also conduct refining economics, choosing blends that best fit their yield and production goals,” he added.

Komolafe stressed that the government had decided not to interfere in commercial negotiations, encouraging the “willing buyer, willing seller” model to guide crude transactions.

Experts Urge Refiners to Broaden Processing Capabilities

Speaking on the same panel, Executive Secretary of the African Refiners and Distributors Association (ARDA), Anibor Kragha, advised Nigerian refiners to diversify the range of crude blends they can process to enhance domestic refining efficiency.

“Our refiners are used to one or two crude types. They need a broader crude slate that their refineries can handle,” he said. “Nigeria must meet its OPEC quota while also ensuring sufficient crude for domestic refining.”

Refiners Disagree, Fault NUPRC on Crude Access

However, Vice-Chairman of CORAN, Mrs Dolapo Okulaja, disputed the NUPRC’s position, insisting that most local refiners were still struggling to obtain adequate feedstock.

“We need clarity on how much crude is allocated for local refining. There’s a clear imbalance between what is produced and what is supplied domestically,” she argued.

Okulaja expressed frustration that refineries were being under-supplied despite the Petroleum Industry Act (PIA) provisions mandating domestic crude obligations.

“If I have a 20,000-barrel-per-day refinery and I’m only getting 5,000 barrels, how do I sustain operations or repay investors?” she asked.

She further pointed to infrastructure deficits, such as the lack of pipelines to supply crude directly to refineries, as a major challenge.

“We can’t keep moving crude in tankers. Pipeline infrastructure is critical and requires public-private collaboration,” she added.

CORAN Blames PIA Clauses for Supply Conflicts

Meanwhile, CORAN President, Momoh Oyarekhua, argued that the Petroleum Industry Act (PIA), though intended to promote local refining, has complicated the crude allocation process.

“You cannot impose a domestic supply obligation and at the same time insist on the willing buyer, willing seller condition. It creates a policy contradiction,” Oyarekhua said.

Industry stakeholders at the summit called for clearer implementation of the DCSO, improved logistics, and better alignment between regulators and refinery operators to achieve Nigeria’s long-term goal of self-sufficiency in refined petroleum products.