The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a directive mandating exploration and production companies to fulfill their crude oil supply obligations to local refineries. The commission warned that failure to comply would result in the denial of export permits for crude oil cargoes intended for domestic refining.
This directive follows concerns from local refiners, including the Dangote Refinery, about difficulties in securing adequate crude supplies, raising questions about Nigeria’s energy self-sufficiency. The Dangote Refinery, with a processing capacity of 650,000 barrels per day, is expected to receive 325,000 barrels daily from oil producers. However, reports indicate that the refinery has faced challenges in meeting this demand, with suppliers requesting partial payment in U.S. dollars.
In a letter dated February 2, 2025, NUPRC Chief Executive Gbenga Komolafe emphasized that diverting crude oil designated for local refineries violates the law. He cited Section 109 of the Petroleum Industry Act 2021, which ensures a stable supply of crude oil to domestic refineries and strengthens national energy security. Komolafe stated that the commission would strictly enforce the policy and penalize defaulters.
The NUPRC has already taken significant regulatory actions to enforce compliance, including developing and signing the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as creating the Domestic Crude Supply Obligation (DCSO) framework and procedure guide for implementation.
The commission has cautioned against further breaches from either party and advised refiners to adhere to international best practices in procurement and operational matters. It reminded producers that any variation of the DCSO policy conditions requires express approval from the Chief Executive before selling crude outside the agreed framework, to prevent abuse.
The NUPRC warned that it would no longer tolerate violations of domestic crude supply regulations, stressing that non-compliance threatens Nigeria’s energy security.
