The Chairman of the Crude Oil Refineries Owners Association of Nigeria (CORAN), Mr. Momoh Oyarekhua, has urged the Nigerian government to shield local refineries from undue competition posed by importers and international petroleum traders. He referenced Section 317(8-9) of the Petroleum Industry Act (PIA), calling for more robust protection for indigenous refineries.
In a recent media address, Oyarekhua expressed concerns over how local refineries are being treated, noting challenges such as pricing, product quality, and accusations of monopoly, particularly involving Dangote. He emphasised that, despite the President’s promise to supply crude oil, local refineries face substantial hurdles due to a lack of government incentives.
Addressing Quality Concerns of Imported Products
Oyarekhua highlighted the potential for adulterated petroleum products entering Nigeria, stressing the need for regulatory action to maintain quality standards and encourage reliance on domestically refined products. He remarked, “We see the importation of low-quality products as an effort to undermine our local refining efforts. If imported products compete with locally refined ones, it hinders healthy competition.”
He also pointed to statements made by Dangote, indicating that some imported products are indeed blended, acknowledging, “Some of the things Dangote has said are quite very true. We are aware of these practices.”
Pricing Pressures and FX Volatility
Oyarekhua addressed the issue of pricing, noting that fluctuations in foreign exchange (FX) rates heavily influence product prices, contributing to market instability. “The FX element is significant,” he noted. “Today, FX rates are volatile, with the parallel market at around N1,700 or more. The fluctuating crude prices add to this instability.”
He also raised doubts about claims that petrol could be imported into Nigeria below N900, pointing out, “This is an international market; calculations are transparent. Anyone claiming to import products cheaper needs scrutiny.”
Calls for Government Support and Incentives
Local refineries face additional frustration due to a lack of incentives from the government, despite recent statements by the President on crude supply for local refiners. “There has been no incentive or support for our operations,” Oyarekhua lamented. “Although the President mentioned crude supply for modular refineries, none has been provided, nor have we had any discussions on the matter. Seven years in this industry have been marked by persistent frustration.”
He concluded by calling for meaningful government support, particularly from regulatory bodies, stating, “We hope for governmental backing to ease these challenges and allow local refining to thrive.”