The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has revealed the reason why International Oil Companies are finding it difficult to allocate crude to domestic refiners, including the Dangote Petroleum Refinery under the Domestic Crude Oil Supply Obligation framework.
He said a pre-production agreement signed by most IOCs to secure offtake of crude products with long-term customers is the reason local refiners are not getting needed allocations.
Lokpobiri disclosed this while speaking at the ongoing Nigeria Energy International Summit on Wednesday in Abuja.
Recently, local refiners accused the regulator of failure to allocate sufficient crude oil to local refineries, preventing domestic refiners from reaching their full production potential.
They accused the regulators of preferring to issue licences to import petrol. This came as the downstream regulator said the country’s three major operational refineries contribute less than 50 per cent of the nation’s daily petrol consumption.
However, the refiners argued that the sole reason why local refiners were not operating at full capacity was because the government refused to allocate sufficient crude to these facilities.
