The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a firm directive to exploration and production companies, demanding strict adherence to the Crude Oil Supply Obligations (COSO) for local refineries. The commission further warned that failure to meet these obligations would result in the denial of export permits for crude oil cargoes intended for domestic refining.
In a circular released on Monday, the NUPRC underscored that any adjustments to crude oil cargoes meant for local refining would require express approval from the commission’s Chief Executive. This move follows persistent complaints from domestic refiners, including the Dangote Petroleum Refinery, regarding inadequate crude oil supplies, raising concerns about Nigeria’s energy security and its capacity to meet local refining needs.
According to NUPRC data, the Dangote Refinery is expected to process 550,000 barrels of crude oil per day, equating to approximately 17.05 million barrels per month in the first half of 2025. However, refinery sources indicate that the government has failed to meet these supply demands, with suppliers now requesting partial payment in US dollars.
In a letter dated February 2, 2025, addressed to exploration and production companies, NUPRC’s Chief Executive, Gbenga Komolafe, reiterated that diverting crude oil designated for domestic refineries is a violation of Nigerian law. Komolafe cited Section 109 of the Petroleum Industry Act 2021, which guarantees a stable supply of crude oil to domestic refineries, thereby bolstering national energy security. He confirmed that the NUPRC would enforce this regulation strictly, penalizing those who fail to comply.
The commission has already taken substantial regulatory actions to ensure adherence to the Domestic Crude Supply Obligation. 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 the DCSO framework and implementation procedures.
The letter further emphasized that any alterations to cargoes designated for local refineries would only be permitted with the express consent of the NUPRC Chief Executive. “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,” the letter stated. “All cargoes designated for domestic refining can only be altered with the express approval of the Commission Chief Executive.”
A recent stakeholder meeting held last weekend, attended by over 50 industry players, revealed a tension between refiners and producers over the implementation of the Domestic Crude Supply Obligation policy. Refiners accused producers of failing to meet their supply commitments and preferring to export crude abroad, forcing refiners to seek alternative sources. On the other hand, producers contended that refiners frequently failed to meet commercial and operational terms, pushing them to explore other markets to avoid operational challenges.
Despite the tensions, both sides acknowledged the NUPRC’s efforts to enforce compliance with the Domestic Crude Supply Obligation, and the commission reiterated its commitment to maintaining stringent oversight. The NUPRC advised refiners to adhere to international procurement and operational standards and reminded producers that any variation in the terms of the COSO requires approval from the Commission Chief Executive before crude oil can be sold outside the established framework.
The NUPRC further warned that any breaches would no longer be tolerated, emphasizing that non-compliance threatens Nigeria’s energy security and the country’s overall self-sufficiency in refining.
