The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has cautioned oil companies that failure to supply local refineries will result in the revocation of their export permits.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has told exploration and production companies to stick to their Crude Oil Supply Obligations for local refineries without fail.
They also made it clear that if oil companies don’t meet their local crude supply commitments, they won’t get export permits for crude oil meant for domestic refining.
In a circular released by their Public Affairs Unit on Monday, the commission emphasized that any changes to cargoes set for domestic refining need to be approved by the Commission’s Chief Executive.
This move comes after local refiners, including the Dangote Refinery, raised concerns about struggling to get enough crude supplies, which is a big deal for Nigeria’s energy independence.
According to data from NUPRC, the Dangote Refinery is projected to process 550,000 barrels daily and 17.05 million barrels monthly in the first half of the year.
However, sources from the refinery say the government hasn’t been able to meet this demand, with suppliers asking for partial payments in US dollars.
In a letter dated February 2, 2025, sent to exploration and production companies and their partners, the Commission Chief Executive, Gbenga Komolafe, reiterated that diverting crude oil meant for local refineries is against the law.
He pointed to Section 109 of the Petroleum Industry Act 2021, which aims to ensure a steady supply of crude oil to domestic refineries and boost national energy security. Komolafe mentioned that NUPRC will be strictly enforcing this policy and penalizing those who don’t comply.
He also noted that the commission has already taken important steps to ensure adherence to the Domestic Crude Supply Obligation, including developing and signing the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, along with creating the DCSO framework and procedure guide for implementation.
“Kindly note that the diversion of crude cargo designated for domestic refineries is a violation of the law, and the Commission will henceforth disallow export permits for such cargoes.
“All cargoes designated for domestic refining can only be altered with the express approval of the Commission Chief Executive. The above is for your strict compliance,” the letter read.
A stakeholder meeting involving over 50 prominent industry participants took place last weekend as part of ongoing efforts to address the issue at hand.
During the discussions, refiners and producers exchanged accusations regarding the inconsistent application of the Domestic Crude Supply Obligation (DCSO) policy. Refiners contended that producers were not fulfilling their supply commitments and preferred to export crude, which forced refiners to look for alternative feedstock sources. On the other hand, producers claimed that refiners frequently failed to meet commercial and operational agreements, leading them to seek opportunities in other markets to avoid operational disruptions.
Despite their disagreements, both parties recognized that the regulatory body has taken necessary steps to ensure adherence to the policy.
The commission issued a warning against any further violations from either side. It urged refiners to follow international best practices in their procurement and operational processes, while reminding producers that any changes to the DCSO policy must receive explicit approval from the CCE before crude can be sold outside the established framework. This measure aims to prevent potential misuse.
The CCE emphasized that it would not tolerate any further breaches of domestic crude supply regulations, highlighting that non-compliance poses a significant risk to Nigeria’s energy security.