The federal government, through the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), has reached an agreement with producers to permit the sale of crude oil to domestic refiners at market prices according to reports from Reuters.
This resolution ends a supply dispute that has strained relations with international oil companies.
The NUPRC Chief Executive, Gbenga Komolafe emphasized that pricing issues should not hinder domestic refining.
“We will never allow price strangulation to disincentivise our domestic refining capacity optimisation,” said Komolafe.
Komolafe highlighted the commission’s commitment to preventing “crude supply profiteering” while ensuring that oil production remains profitable.
To ensure transparency, the NUPRC has requested monthly cargo price quotes on crude oil supply and delivery from both producers and refiners.
The NUPRC aims to balance upstream development with a sustainable domestic energy supply chain, reinforcing its role in fostering a fair and profitable oil production environment.
Additional refineries expected to benefit from the crude oil supply include the Warri and Port Harcourt refineries, which are slated to receive 75,000 and 54,000 barrels of crude oil per day, respectively. Meanwhile, smaller refineries such as Waltersmith, OPAC, and Niger Delta Petroleum Refinery, among others, are set to receive 10,000 barrels per day or less.
Later in April, the NUPRC mandated all oil companies in Nigeria to supply crude oil to domestic refineries that are unable to source it locally. Only after meeting these domestic supply obligations are producers allowed to export crude oil. The Petroleum Industry Act (PIA) mandates that international oil companies must first meet local demand by supplying crude oil to domestic refineries before exporting any surplus.
Edwin asserted that the IOCs are intentionally obstructing the refinery’s efforts to purchase local crude by inflating premium prices above market rates. This forces the refinery to import crude from distant countries such as the United States, resulting in significantly higher costs.
Nigerians expected the 650,000 barrels Dangote refinery to significantly or end the country’s petrol import dependence in the era of post-subsidy removal.
Credit: Aghogho Udi
