A refinery allocation letter can provide useful evidence about a proposed EN590 diesel supply arrangement, but buyers should not treat the document as automatic proof that a cargo exists, that the seller owns the product, or that the seller has unrestricted authority to sell it.

The value of an allocation letter depends on several factors: who issued it, what volume and product it covers, the allocation period, the loading location, the rights it represents, and whether the issuing party can independently confirm the information.

For an international EN590 buyer, verification should therefore go beyond checking whether a document looks official. The buyer needs to establish whether the document connects a legitimate supply source to the specific transaction being proposed.

That process can involve issuer verification, refinery or producer relationship checks, reference confirmation, commercial-document comparison, supplier due diligence and, where appropriate, independent inspection.

---

What Is a Refinery Allocation Letter?

A refinery allocation letter is a document presented as evidence that a refinery, producer, marketing entity or authorized supply party has allocated a stated quantity of petroleum product for a particular buyer, supplier or transaction.

The exact format and legal significance can vary between producers, jurisdictions and commercial arrangements.

An allocation letter may identify:

• product;
• quantity;
• allocation period;
• loading location;
• refinery or supply source;
• buyer or seller;
• allocation reference;
• validity period;
• commercial conditions;
• authorized signatory.

However, the existence of a document does not establish its authenticity by itself.

The buyer must establish whether the named issuer actually exists, whether the signatory has authority, whether the allocation reference is genuine and whether the allocation applies to the transaction under consideration.

What an allocation letter can establish

Depending on the issuer and document, an allocation letter may provide evidence of:

• an allocation or supply commitment;
• an identified product;
• an allocated quantity;
• a defined supply period;
• a loading location;
• a relationship between the named parties.

The buyer should still verify those claims independently where the transaction warrants it.

What an allocation letter cannot establish by itself

An allocation letter does not automatically prove:

• physical inventory;
• completed production;
• title to the product;
• unrestricted authority to sell;
• terminal readiness;
• vessel availability;
• completed inspection;
• export clearance;
• cargo loading;
• final delivery.

This distinction matters because allocation, ownership, inventory and loading status represent different stages of the petroleum supply chain.

---

Who Should Issue an EN590 Refinery Allocation Letter?

The buyer should first identify the party that supposedly issued the document.

Possible issuers may include:

• a refinery or producer;
• a refinery’s authorized marketing entity;
• a national oil company or other producer;
• an authorized allocation holder;
• another entity with documented rights to the relevant supply.

The correct issuer depends on the commercial structure.

A broker or intermediary may legitimately transmit documents in a transaction, but the buyer should distinguish between:

the party transmitting the document

and

the party whose authority gives the document its commercial significance.

That distinction is critical.

If a broker sends an allocation letter, the buyer should not automatically assume that the broker issued it or that the broker owns the allocated product.

---

What Information Should a Refinery Allocation Letter Contain?

There is no universal template that applies to every petroleum transaction.

However, buyers should expect the document to contain enough information to connect the allocation to the proposed transaction.

Product and specification

The document should identify the product clearly.

For an EN590 transaction, the buyer should check:

• product name;
• applicable specification;
• sulfur requirement;
• grade;
• relevant quality requirements.

Do not assume that every document describing a product as “diesel” establishes compliance with the buyer’s required EN590 specification.

Volume and allocation period

Check:

• allocated quantity;
• unit of measurement;
• allocation period;
• lifting period;
• validity date.

The quantity should make commercial sense relative to the proposed transaction.

If the buyer requires 50,000 metric tonnes but the document refers to a substantially different quantity, the supplier should explain the discrepancy before the buyer proceeds.

Loading location

The document should identify the relevant loading point where appropriate.

Compare the stated location with:

• the commercial offer;
• the proposed Incoterm;
• terminal information;
• vessel arrangements;
• inspection location.

A mismatch does not automatically prove fraud, but it requires clarification.

Buyer and seller information

Check the legal identities of the parties.

Compare:

• company name;
• registered entity;
• address;
• corporate domain;
• transaction role;
• signatory;
• contact details.

A supplier’s trading name may differ from its registered legal entity, so the buyer should establish the relationship rather than reject every variation automatically.

Reference number and validity

Look for:

• allocation reference;
• issue date;
• validity period;
• revision number where applicable;
• contact or verification channel.

A reference number becomes particularly useful when the issuing organization provides an official method for checking it.

For example, NNPC’s NUIMS platform currently provides an online Off-OPEC Allocation Verification function that allows users to enter an allocation reference and retrieve verified details. That illustrates an important verification principle: where the actual issuing organization provides an official verification channel, buyers should use that channel rather than rely solely on a copy supplied by an intermediary.

That example should not be generalized to every refinery or allocation system. Verification procedures vary by issuer.

---

How to Verify a Refinery Allocation Letter

A buyer can approach verification as a sequence rather than as a single document check.

Step 1: Verify the issuing entity

Start with the organization named on the allocation letter.

Confirm:

• legal name;
• official website;
• corporate registration where relevant;
• physical presence;
• relevant petroleum activities;
• official contact channels.

Do not rely solely on telephone numbers, email addresses or website links printed on the document itself.

Where possible, obtain contact information independently from the issuer’s official corporate channels.

This reduces the risk of communicating with an intermediary who simply controls the contact details shown on the document.

---

Step 2: Verify the refinery relationship

Next, determine what relationship exists between the named seller and the refinery or producer.

Ask:

• Is the seller the refinery?
• Is the seller an authorized marketing entity?
• Is the seller an allocation holder?
• Is the seller a trader?
• Is the seller acting under a mandate?
• What document establishes that authority?

This step matters because access to an allocation does not automatically equal ownership of the product.

A trader may legitimately sell refinery-linked product without owning the refinery.

The buyer therefore needs to establish the chain of authority.

---

Step 3: Check the allocation reference

If the document contains a reference number, use the issuer’s official verification mechanism where one exists.

Do not assume that a reference number proves authenticity merely because it looks plausible.

Compare:

• reference number;
• issue date;
• product;
• quantity;
• allocation period;
• named parties;
• loading location.

If the issuer confirms the reference but the details differ from the document supplied by the seller, stop and resolve the discrepancy before proceeding.

---

Step 4: Match the product and volume

The allocation should make sense in relation to the commercial offer.

Compare the letter against the proposed transaction for:

The purpose is not simply to find a matching number.

The buyer wants to establish commercial consistency across the documents.

---

Step 5: Confirm the allocation period and loading window

An allocation period does not necessarily equal a physical loading date.

For example, an allocation could cover a month while the actual cargo loads during a narrower window within that period.

The buyer should therefore ask:

• What period does the allocation cover?
• What loading window applies?
• Has the terminal confirmed the window?
• Does the seller depend on future refinery production?
• Has the allocation changed since issuance?

This distinction becomes especially important when the buyer must coordinate vessel nominations, inspections or downstream delivery.

---

Step 6: Verify the Seller’s Authority to Transact

This is one of the most important checks.

A legitimate allocation document does not automatically give every intermediary the right to sell the allocated volume.

The buyer should establish:

Who holds the allocation?

→

Who has the right to market it?

→

Who has authority to sign the commercial contract?

→

Who will receive payment?

These parties may be the same entity, but they do not have to be.

Where they differ, the supplier should provide a clear documentary explanation of the chain of authority.

---

Step 7: Compare the Letter With Supporting Documentation

Do not evaluate the allocation letter in isolation.

Depending on the transaction stage, relevant supporting documentation may include:

• commercial offer;
• supplier corporate documents;
• authorization documentation;
• refinery or producer supply agreement;
• terminal documentation;
• storage documentation;
• inspection arrangements;
• export documentation;
• shipping documentation.

Industry procurement frameworks commonly distinguish between allocation evidence, proof of product and authority to sell. For example, current petroleum procurement requirements published by Petrolodex identify a refinery allocation letter as one possible form of proof associated with allocated production, while separately requiring authorization to sell and other supporting evidence.

That distinction is exactly what a buyer should preserve during due diligence.

---

Step 8: Seek Independent Confirmation Where Appropriate

For a significant transaction, the buyer should consider independent confirmation rather than relying entirely on documents supplied by the seller.

The appropriate verification method depends on the transaction.

Possible methods include:

• direct confirmation from the issuing organization;
• verification through an official issuer portal;
• confirmation through an independently sourced corporate contact;
• independent legal or commercial due diligence;
• terminal confirmation where appropriate;
• independent inspection at the relevant stage.

Inspection companies can verify physical product characteristics and quantities, but buyers should understand what the inspection actually covers.

For example, SGS provides petroleum testing and inspection services covering fuel quality, quantity and grade, including diesel and other distillates.

An inspection report, however, should not be treated as a substitute for verifying who has the legal authority to sell the product.

Physical inspection and commercial authorization answer different questions.

---

Allocation Letter vs. Proof of Product

These concepts often become confused during petroleum procurement.

An allocation letter may indicate that a quantity has been allocated or committed.

Proof of product, depending on the transaction, may provide evidence that product physically exists in storage, has been loaded, or otherwise has a documented physical position.

Examples can include:

• tank storage documentation;
• bill of lading;
• terminal records;
• inspection evidence;
• other recognized physical-product documentation.

The correct document depends on the product’s actual position in the supply chain.

A future refinery allocation cannot automatically prove that the same volume already sits in a tank.

This distinction becomes particularly important when a seller presents an allocation letter as though it were equivalent to immediate physical availability.

---

Allocation Letter vs. Authorization to Sell

These documents answer different questions.

Allocation letter

Primarily addresses:

What supply has the issuing party allocated or committed?

Authorization to sell

Primarily addresses:

Who has authority to market or sell that supply?

One document should not automatically substitute for the other.

A supplier could possess evidence of an allocation while still needing to establish its authority to market the relevant volume to the proposed buyer.

This is why supplier verification should examine the chain of authority, rather than simply asking whether an allocation letter exists.

---

Common Red Flags in EN590 Refinery Allocation Documentation

A red flag does not automatically prove fraud.

It means the buyer should stop, investigate and obtain clarification before proceeding.

1. The issuer cannot independently confirm the document

If the seller refuses reasonable verification through an official channel, the buyer should treat that as a material concern.

2. The allocation reference does not match

Differences between the reference on the document and the issuer’s records require resolution.

3. The refinery name changes between documents

If one document identifies one refinery while another identifies a different producer or supply source, ask the seller to explain the chain.

4. The volume changes without explanation

A change in volume can occur for legitimate commercial reasons, but the supplier should explain the change and provide updated documentation.

5. The loading location does not match

A refinery, terminal, storage location and loading port can represent different points in the supply chain. The seller should explain the relationship rather than leave the buyer to infer it.

6. The seller claims ownership without supporting authority

An allocation document does not automatically establish title.

7. The document relies entirely on broker contacts

The buyer should independently identify the issuer and verify the document through trusted channels.

8. The document contains inconsistent company details

Check:

• company names;
• domains;
• addresses;
• signatories;
• dates;
• references;
• transaction quantities.

9. The supplier treats the allocation letter as complete proof of physical inventory

That claim goes beyond what an allocation letter necessarily establishes.

10. The supplier discourages independent verification

A serious transaction should allow appropriate due diligence.

---

What Buyers Should Ask Before Proceeding

A buyer can use the following questions during supplier due diligence:

1. Who issued the allocation letter?
2. What is the issuer’s legal identity?
3. What allocation reference identifies the document?
4. Can the issuer independently confirm that reference?
5. What product does the allocation cover?
6. What quantity does it cover?
7. What allocation period applies?
8. What loading location applies?
9. Who holds the allocation?
10. Who has authority to sell the allocated volume?
11. What document establishes that authority?
12. Does the proposed seller appear on the allocation?
13. If not, what relationship connects the seller to the allocation holder?
14. Does the allocation depend on future refinery production?
15. What additional evidence supports physical availability?
16. What inspection arrangements apply?
17. Has the terminal or loading point been identified?
18. Have any details changed since the letter was issued?

The objective is not to demand every possible document before every transaction.

The objective is to identify the minimum evidence necessary to establish that the proposed supply and seller relationship make commercial sense.

---

EN590 Refinery Allocation Letter Verification Checklist

A completed checklist does not eliminate transaction risk.

It gives the buyer a structured way to identify missing information before committing further resources.

---

When Should a Buyer Proceed?

A buyer should not use the presence of an allocation letter as the sole trigger for procurement commitment.

Instead, assess whether the document and supporting evidence answer four separate questions:

1. Is the allocation genuine?

Can the buyer establish that the issuing organization actually issued or recognizes it?

2. Does the allocation match the proposed transaction?

Do the product, volume, period and loading location correspond?

3. Does the seller have authority?

Can the seller demonstrate a legitimate right to market the relevant supply?

4. Does the physical supply position make sense?

Does the allocation correspond to existing inventory, future production or another legitimate supply arrangement?

When these questions remain unanswered, the buyer should request clarification before progressing.

The broader article on how refinery allocation influences EN590 diesel supply and procurement explains the role of allocation within the wider supply chain. This verification article focuses specifically on how buyers should evaluate the document and the authority behind it.

---

Conclusion

A refinery allocation letter can provide useful evidence in an EN590 transaction, but the document itself should never replace due diligence.

The buyer should verify the issuer, allocation reference, product, quantity, allocation period and loading location. More importantly, the buyer should establish the relationship between the allocation holder and the seller and determine whether the seller has legitimate authority to market the proposed volume.

The buyer should also distinguish an allocation letter from proof of physical product, title, terminal readiness and independent inspection.

Where the transaction carries significant commercial exposure, buyers should use independent verification channels wherever available and compare the allocation document against the other evidence supporting the proposed supply.

The fundamental principle is simple:

Verify the document, verify the issuer, verify the authority and verify the relationship to the physical supply.

That approach gives an EN590 procurement team a stronger basis for deciding whether a proposed transaction is ready to advance.

---

Internal Linking

This page should have fewer, highly contextual links because its purpose is verification.