Local refinery owners have raised concerns that the lack of crude oil is slowing down investment and full operations in seven new and existing refineries across Nigeria. They warned that without a steady supply of crude, efforts to boost local refining and reduce fuel imports may not succeed.
According to Eche Idoko, the National Publicity Secretary of the Crude Oil Refinery-Owners Association of Nigeria (CORAN), only 852,000 barrels per day (bpd) out of the 1.15 million bpd licensed refining capacity is currently operational. Many refineries are struggling to get crude oil, making it difficult for them to function effectively.
Reports show that five refineries have been approved but are not yet operational, while three others, despite being allocated crude, remain inactive. The OPAC refinery (10,000 bpd) and Duport refinery (2,500 bpd) are also not in operation due to feedstock shortages. Similarly, the Kaduna refinery has approval to refine products but is still non-operational.
Despite the government granting licenses to private investors to improve local refining, the sector continues to struggle due to funding shortages, technical difficulties, and delays in project execution. Idoko stressed that many investors cannot move past the Final Investment Decision stage because they cannot secure a steady crude supply.
Another major concern is the recent decision by Dangote Refinery to halt the sale of petroleum products in naira due to issues with crude supply arrangements. Reports indicate that the Nigerian National Petroleum Company Limited (NNPCL) has allocated large crude volumes to foreign creditors, making it difficult to sustain local supply deals.
Idoko emphasized that two key issues must be addressed to improve refinery operations: guaranteed crude supply and better funding opportunities for refinery projects. The government, he said, must take the lead in ensuring both are met.
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, also highlighted challenges such as inconsistent government policies, security issues, and poor community relations as major obstacles for refinery operations.
Additionally, industry experts like Billy Gillis-Harry and Olatide Jeremiah believe that without proper technical expertise and a supportive business environment, the refinery sector will continue to struggle. Jeremiah urged the government to increase crude oil production to 2.5 million barrels per day to ensure stable supply for local refineries.
Stakeholders are calling on the government to prioritize crude oil availability, create favorable investment policies, and improve funding support to help the refineries operate efficiently and reduce Nigeria’s reliance on fuel imports.