The association praised the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its decision to prohibit the export of crude oil designated for local refineries, stating that this move will boost domestic refining efforts.
In a statement, PETROAN Publicity Secretary Joseph Obele noted that the prioritization of crude oil exports over domestic refining has resulted in significant neglect of local refineries. This has fostered a substantial racketeering problem, as producers and traders prioritize rapid foreign currency acquisition over supporting domestic refining capacity.
He further stated that while 500,000 barrels of crude oil are allocated for domestic use, a considerable portion is diverted to the international market.
PETROAN’s National President, Billy Gillis-Harry, urged the NUPRC to take swift action against those who don’t comply, noting that this policy would improve the availability of petroleum products and help preserve the country’s limited foreign exchange resources.
In a statement released last Monday, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) clarified that, in a February 2, 2025 letter to exploration and production companies and their equity partners, the Commission Chief Executive (CCE), Engr. Gbenga Komolafe, emphasized the illegality of diverting crude oil intended for domestic refineries.
Furthermore, a meeting held last weekend with over 50 key industry stakeholders revealed that refiners and producers attributed inconsistencies in the Domestic Crude Supply Obligation (DCSO) policy implementation to one another; however, they acknowledged the regulator's implementation measures.
Refiners argued that producers weren't sticking to supply agreements and preferred to sell their crude elsewhere, which pushed refiners to seek alternative feedstock. On the flip side, producers claimed that refiners often failed to meet commercial and operational agreements, leading them to look for other markets to avoid operational hiccups.
The regulator warned both sides to steer clear of any more violations and urged refiners to follow international best practices in their procurement and operations.
The Commission also reminded producers not to change the conditions laid out in the DCSO policy without getting explicit approval from the CCE before selling crude outside the agreed terms, to prevent any misuse.
Engr. Komolafe pointed to Section 109 of the Petroleum Industry Act (PIA) 2021, which is designed to ensure a steady supply of crude oil to local refineries and bolster the country’s energy security. He emphasized that the NUPRC will now strictly enforce the policy regarding compliance and defaults by oil companies.