Local Oil Refiners Support Dangote, Criticize IOCs for Crude Supply Obstruction

by milcah tanimu

The Crude Oil Refineries Association of Nigeria (CORAN) has expressed support for Dangote Oil Refinery and Petrochemicals Limited, which recently accused Nigerian oil producers, particularly International Oil Companies (IOCs), of hindering the refinery’s operations by refusing to guarantee crude supply.

Responding to the report, CORAN Chairman Momoh Oyarekhua emphasized that the concerns raised by Dangote Refineries reflect the struggles faced by other members of the association. Speaking on Channels Television, Oyarekhua highlighted the operational challenges caused by the difficulties in obtaining local crude oil.

Oyarekhua argued that the issue extends beyond just the IOCs, implicating Nigerian crude producers in general for frustrating local refineries’ efforts to secure crude supplies. He advocated for selling crude to local refineries in naira, which aligns with the local market’s economic structure and reduces pressure on the scarce US dollar.

He referenced engagements with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and stressed the importance of adhering to the Domestic Crude Oil Supply Obligation outlined in the Petroleum Industry Act (PIA). Oyarekhua noted that despite legislative efforts to support local refineries, crude producers prefer exporting oil rather than supplying it domestically.

Highlighting the economic benefits of local refining, Oyarekhua pointed out that the cost of finished products would significantly decrease if local refineries were adequately supported. He cited the drop in diesel prices following Dangote’s entry into the market as evidence of the positive impact of local production.

Oyarekhua called on the government to enforce existing laws to ensure that local refineries receive the necessary support. He lamented the lack of support for CORAN members over the past few years and urged the government to address the issue promptly.

Earlier this week, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), accused the IOCs of inflating local crude oil prices, making it prohibitively expensive for local refineries. CORAN joined Dangote Refineries in calling on the National Assembly and the executive arm of government to intervene in the oil and gas sector to prevent further challenges for local refineries.


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