The Federal Government would henceforth deny export permits for crude oil cargoes intended for domestic refining, if oil companies do not fulfill their domestic crude obligations.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) issued the warning in a statement dated 2 February, 2025, and addressed to exploration and production companies and their equity partners.
In the statement, the Commission Chief Executive (CCE), Engr. Gbenga Komolafe insisted that any changes to cargoes designated for domestic refining must receive express approval from the CCE.
The statement explained that diverting crude oil meant for local refineries violates the law.
It explained that at a meeting last weekend which was attended by more than 50 critical industry players, refiners and producers blamed each other for the inconsistencies in the implementation of the Domestic Crude Supply Obligation (DCSO) policy.
While the refiners claimed producers were not meeting supply terms and preferred to sell their crude outside, forcing them to look elsewhere for feedstock, the producers accused refiners of challenges in meeting commercial and operational terms, forcing them to explore other markets elsewhere to avoid unnecessary operational bottlenecks.
However, both parties agreed that the regulator has put in place appropriate measures for effective implementation.
The regulator cautioned against any further breaches from either party. It advised refiners to adhere to international best practices in procurement and operational matters and reminded producers not to vary the conditions stated in the DCSO policy without obtaining express permission from the CCE before selling crude outside the agreed framework. This is to avoid abuse.
According to Engr. Komolafe, NUPRC will henceforth strictly enforce Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to ensure a stable supply of crude oil to domestic refineries and strengthen the nation’s energy security.
He stated that significant regulatory actions have already been taken by the Commission, in line with the enabling laws, to enforce compliance with the Domestic Crude Supply Obligation (DCSO).
These actions include the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as the creation of the DCSO framework and procedure guide for implementation.
Also, during monthly meetings with upstream operators, NUPRC monitors compliance with production metrics that provide insight into available crude volumes two months in advance, facilitating discussions regarding supply commitments to refineries.
“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 NUPRC Head warned.
The violations of the laws governing domestic crude supplies to local refineries leaves serious implications for the country’s energy security.
