Due to the failure of oil companies to meet the crude oil demand of local refineries, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a warning that it will deny export permits for crude oil cargoes designated for domestic refining.
In a statement issued in Abuja, the Commission emphasized that oil companies must fulfill their domestic crude supply obligations or face export restrictions. The Commission emphasized that any changes to cargoes designated for domestic refining must receive explicit approval from the Commission Chief Executive.
In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, the Commission Chief Executive (CCE), Engr. Gbenga Komolafe, reaffirmed that diverting crude oil intended for local refineries is a violation of the law.
At a meeting last weekend, attended by over 50 key industry stakeholders, refiners and producers exchanged blame over the inconsistencies in implementing the Domestic Crude Supply Obligation (DCSO) policy. However, both sides acknowledged that the regulator had established adequate measures for effective enforcement. While refiners argued that producers were failing to meet supply agreements and instead preferred to sell crude oil externally, forcing them to seek alternative feedstock sources, producers countered that refiners often failed to meet commercial and operational terms, compelling them to explore other markets to avoid operational challenges.
The regulator warned both parties against further breaches and urged refiners to adhere to international best practices in procurement and operations.
The Commission also reminded producers that any deviation from the conditions outlined in the Domestic Crude Supply Obligation (DCSO) policy requires explicit approval from the Commission Chief Executive (CCE) before selling crude outside the agreed framework to prevent misuse.
Engr. Gbenga Komolafe cited Section 109 of the Petroleum Industry Act (PIA) 2021, which ensures a stable supply of crude oil to domestic refineries and bolsters national energy security. He emphasized that the NUPRC will now strictly enforce the policy, holding oil companies accountable for compliance and violations.
He emphasized that the Commission has already taken significant regulatory actions, in accordance with existing laws, to enforce compliance with the Domestic Crude Supply Obligation (DCSO). These measures include the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as the establishment of a comprehensive DCSO framework and procedural guide for effective implementation.
