The Nigerian Upstream Petroleum Regulatory Commission has threatened to revoke licences of exploration and production companies that do not adhere to the crude oil supply obligations for local refineries.
In a circular issued by its public affairs unit, the commission also warned that it would deny export permits for crude oil cargoes intended for domestic refining if oil companies fail to meet their local crude supply commitments.
It also directed that any changes to cargoes designated for domestic refining must receive express approval from the Commission’s Chief Executive.
The directive follows complaints from local refiners including the Dangote Petroleum Refinery, over difficulties in securing adequate crude supplies, raising concerns about Nigeria’s energy self-sufficiency.
According to NUPRC data, the Dangote refinery is expected to process 550,000 barrels per day and 17.05 million barrels per month in the first half of the year.
However, sources at the refinery claim the government has not met this demand, with suppliers requesting partial payment in US dollars.
In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, the Commission Chief Executive, Gbenga Komolafe, reiterated that diverting crude oil meant for local refineries violates the law.
Citing 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 NUPRC will now strictly enforce the policy and penalise defaulters.
Komolafe noted that the commission has already taken significant regulatory actions to enforce compliance with the Domestic Crude Supply Obligation.
These include developing and signing the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as creating the DCSO framework and procedure guide for implementation.
“Kindly note that the diversion of crude cargo designated for domestic refineries is a violation of the law, and the Commission will henceforth disallow export permits for such cargoes.
“All cargoes designated for domestic refining can only be altered with the express approval of the Commission Chief Executive. The above is for your strict compliance,” the letter read.
As part of efforts to resolve the issue, a stakeholder meeting attended by more than 50 key industry players was held last weekend, where both refiners and producers blamed each other for inconsistencies in implementing the Domestic Crude Supply Obligation policy.
The commission cautioned against further breaches from either party.
