Due to oil companies’ failure to meet the crude oil supply demands of local refineries, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a warning that it will no longer grant export permits for crude oil cargoes intended for domestic refining.
In a statement released in Abuja, the Commission announced that it would impose a ban on exports if oil companies fail to fulfill their domestic crude obligations. It also emphasized that any changes to cargoes designated for domestic refining must be approved by the Commission’s Chief Executive.
The statement noted: “In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, the Commission Chief Executive (CCE), Engr. Gbenga Komolafe, reiterated that diverting crude oil intended for local refineries is a violation of the law.”
At a recent meeting attended by over 50 key industry players, including refiners and producers, both sides blamed each other for the failure to implement the Domestic Crude Supply Obligation (DCSO) policy effectively. While refiners accused producers of not meeting supply agreements and choosing to sell crude abroad, producers responded that refiners were often unable to meet commercial and operational terms, forcing them to seek alternative markets.
The Commission has now warned against any further breaches by either party and urged refiners to adhere to international best practices in procurement and operational matters.
The NUPRC reminded producers that any changes to the DCSO policy, such as selling crude outside the agreed framework, must be approved by the CCE to prevent abuse. Engr. Komolafe referenced Section 109 of the Petroleum Industry Act (PIA) 2021, which is designed to ensure a stable supply of crude to domestic refineries and strengthen the country’s energy security. He emphasized that the NUPRC would rigorously enforce the policy and take strong action against companies in violation of their obligations.
The Commission has already implemented significant regulatory measures to ensure compliance with the DCSO, including the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as the creation of a DCSO framework and procedure guide for enforcement.
