Local refiners under the umbrella of the Crude Oil Refinery Owners Association of Nigeria (CORAN) have raised fresh concerns over the diversion of crude oil meant for domestic processing, warning that weak delivery compliance is leaving plants underutilised and undermining Nigeria’s energy security.
 
This was made known by the Chairman of CORAN’s Board of Trustees, Emmanuel Ihenacho, during a courtesy visit to the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oritsemeyiwa Eyesan.
 
Ihenacho said while policy provisions support domestic crude supply, actual deliveries remain inconsistent, creating a widening gap between allocation and utilisation across Nigeria’s growing base of modular and mid-scale refineries.
 
According to him, available data show that about 483,000 barrels per day allocated for domestic refining do not fully reach local processors, with a significant portion lost to operational constraints, re-trading, and flexibility provisions.
 
“We stand before you today as partners in execution, the downstream arm of Section 109 of the Petroleum Industry Act (PIA). When crude is allocated for domestic refining, we are the ones who translate that allocation into petrol in Ibadan, diesel in Kano, and aviation fuel at MMIA. When you secure crude at the wellhead and terminal, we ensure that value is retained within Nigeria’s economy.
 
“However, Madam Chief Executive, as you are fully aware, allocation does not always translate to delivery. And a license does not automatically translate to production. That gap between policy and product is why we are here today. Permit me to respectfully highlight the realities as experienced by your downstream partners: First, DCSO compliance remains suboptimal. Data indicate that of the 483,000 barrels per day allocated, only a fraction consistently reaches domestic refineries. The rest is lost to operational constraints, re-trading, or flexibility provisions. Each diverted barrel represents lost jobs, lost value, and lost opportunity for Nigeria,” he stated.
 
The CORAN chairman noted that despite ongoing reforms in the upstream sector and increasing recognition of domestic crude supply obligations, the absence of a consistent feedstock supply continues to constrain refinery operations.
 
He said several plants, including modular facilities, remain functional but are unable to operate at optimal capacity due to erratic crude deliveries.
 
“Our members: Edo Refinery, Duport/Pulon, OPAC, among others, remain operational but underutilised due to inconsistent supply. A refinery cannot be sustained on erratic feedstock. Without stability, financing weakens, workforce morale declines, and community expectations are unmet,” he said.
 
Beyond supply gaps, Ihenacho flagged pricing challenges, noting that current frameworks tied to international benchmarks fail to reflect the realities of domestic refining operations.