By Tanko Lami
ABUJA, Nigeria (VOICE OF NAIJA)-The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has directed exploration and production companies to strictly comply with the Crude Oil Supply Obligations for local refineries.
The commission warned that it would withhold export permits for crude oil cargoes intended for domestic refining if companies fail to meet their supply commitments.
In a circular issued by its Public Affairs Unit on Monday, NUPRC emphasized that any changes to cargoes designated for local refining must receive direct approval from the Commission’s Chief Executive.
This directive comes in response to complaints from local refiners, including the Dangote Petroleum Refinery, over difficulties in securing sufficient crude supplies, raising concerns about Nigeria’s energy security.
According to NUPRC data, the Dangote refinery is expected to process 550,000 barrels per day and 17.05 million barrels per month in the first half of the year.
However, refinery sources claim the government has not met this demand, with suppliers requesting partial payment in US dollars.
In a letter dated February 2, 2025, addressed to oil exploration and production firms and their equity partners, NUPRC Chief Executive Gbenga Komolafe reiterated that diverting crude meant for local refineries is a violation of the law.
Citing Section 109 of the Petroleum Industry Act 2021, which mandates a stable supply of crude oil to domestic refineries to enhance national energy security, Komolafe stated that NUPRC will strictly enforce the policy and penalize defaulters.
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He added that the commission has already taken key regulatory actions to ensure compliance, including signing the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023 and developing a 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.
In a bid to resolve ongoing disputes over crude supply, more than 50 key industry stakeholders convened for a meeting last weekend.
During discussions, refiners and producers accused each other of inconsistencies in implementing the Domestic Crude Supply Obligation (DCSO) policy.
Refiners alleged that producers were failing to meet supply agreements, opting instead to sell crude abroad, which forced them to seek alternative feedstock sources.
On the other hand, producers claimed that refiners often failed to meet commercial and operational terms, leaving them with no choice but to explore other markets to avoid logistical challenges.
Despite the disagreements, both parties acknowledged that the regulator had put effective measures in place to enforce compliance.
The commission cautioned against further violations from either side, advising refiners to adhere to international best practices in procurement and operations.
It also reminded producers that any deviation from the DCSO policy requires express approval from the Commission Chief Executive (CCE) before crude can be sold outside the agreed framework, a step aimed at preventing policy abuse.
The CCE issued a stern warning that breaches of domestic crude supply regulations would no longer be tolerated, emphasizing that non-compliance poses a serious threat to Nigeria’s energy security.