The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has threatened to deny oil companies export licenses if they fail to supply crude oil to local refineries.
According to a statement issued by the Public Affairs Unit of the NUPRC, the warning was contained in a letter dated February 2, 2025, signed by the Commission Chief Executive (CCE), Engr. Gbenga Komolafe, and addressed to oil companies and their equity partners.
It was stated that the commission is concerned about the growing tensions between local refiners and crude oil producers over the inconsistent implementation of the Domestic Crude Supply Obligation (DCSO) policy.
Komolafe noted that diverting crude oil meant for local refineries is a violation of Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to ensure energy security by guaranteeing a stable supply of crude to domestic refineries.
He warned that the NUPRC will no longer tolerate breaches of the law and will strictly enforce the DCSO policy, including denying export permits for crude cargoes designated for domestic refining without prior approval from the Commission.
“At a meeting last weekend, attended by more than 50 critical industry players, both the refiners and producers blamed each other for the inconsistencies in the implementation of the Domestic Crude Supply Obligation (DCSO) policy. They, however, agreed that the regulator has put in place appropriate measures for effective implementation.
“While the refiners claimed that producers were not meeting supply terms and preferred to sell their crude outside, forcing them to look elsewhere for feedstock, the producers countered that refiners hardly met commercial and operational terms, forcing them to explore other markets elsewhere to avoid unnecessary operational bottlenecks,” the circular read.
Komolafe urged refiners to adhere to international best practices in procurement and operations, while reminding producers to seek express permission from the Commission before altering any terms of the DCSO policy.
He stressed that the NUPRC’s activities are critical to safeguarding Nigeria’s energy security and ensuring the growth of the domestic refining sector.
“Kindly note that the diversion of crude cargo designated for domestic refineries is a contravention of the law and the Commission will henceforth disallow export permits for designated crude cargos for domestic refining,” the CCE warned.
Implementation of Naira-to-crude initiative inconsistent – Nairametrics report
A report by Nairametrics earlier today revealed that Naira-to-crude initiative of the federal government, which was aimed at bolstering domestic refining capacity has been marred by inconsistent implementation.
- The report noted that as a result of the inconsistency, local refineries are struggling to secure crude supplies to maintain operations.
- Documents seen by Nairametrics analysts show that the Dangote Refinery was allocated crude purchase in Naira and Dollars, a disregard of the Naira-to-Crude arrangement.
- The 650,000-bpd-capacity mega refinery has resorted to importing crude oil from the United States.
