Local crude shortage crippling Nigerian refineries – MAN

Nigeria's ambition for energy security and lower fuel costs is being jeopardized by a critical shortage of domestic crude oil available to local refineries. Manufacturers are warning that this situation is undermining the nation's industrialization drive and economic benefits.

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That is obvious. The Dangote refinery’s decision to import crude oil from the United Arab Emirates amplifies the long-standing claims by domestic refiners that they are not receiving an adequate and reliable supply of local crude.

The Manufacturers Association of Nigeria (MAN) has expressed serious concern over the inability of Nigerian refineries to secure adequate crude oil from within the country. This forces them to compete with international buyers for Nigeria's own crude, often at higher costs due to logistics. MAN's Director-General, Segun Ajayi-Kadir, pointed to reports of the Dangote Petroleum Refinery importing crude from the United Arab Emirates as clear evidence of persistent domestic supply constraints.

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The inability of our local refineries to access sufficient feedstock from Nigeria is distressing. For far too long, Nigerian refineries have had to compete with international buyers for our own (Nigerian) crude, often at international market prices plus additional logistics costs.

Ajayi-Kadir stated that this reliance on imported feedstock is economically inefficient and erodes the advantages of local refining, such as reducing import dependence, conserving foreign exchange, and adding value within Nigeria. He stressed that a country as rich in crude oil as Nigeria should not be in a position where its domestic refineries struggle for supply.

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This situation is not only economically inefficient, but it also erodes the advantage of local refining, which is to reduce import dependence, conserve foreign exchange, and create value addition within the country.

MAN is calling on the Federal Government to overhaul the domestic crude supply framework. They urge the Nigerian National Petroleum Company Limited (NNPC) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to ensure local refineries receive priority access to a sufficient and consistent share of Nigeria's crude production on fair commercial terms. The association also emphasized the need to intensify crude production, improve pipeline security, and enhance terminal reliability to balance domestic needs with export commitments.

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This situation highlights the urgent need for a more structured and transparent domestic crude oil supply framework that prioritises local refineries.