In a swift move to avert a confrontation between oil producers and oil refiners, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) at the weekend warned that it will henceforth deny export permits for oil cargoes intended for domestic refining, if oil companies do not fulfill their domestic crude obligations.
The commission insists that any changes to cargoes designated for domestic refining must receive express approval from the Commission’s Chief Executive (CCE).
“Kindly note that the diversion of crude cargo designated for domestic refineries is a contravention of the law and the Commission will henceforth disallow export permits for designated crude cargos for domestic refining,” the CCE, Gbenga Komolafe, warned.
He added that the NUPRC will no longer tolerate violations of the laws governing domestic crude supplies to local refineries, as such actions have implications for the country’s energy security.
In a telephone interview last night1q1, Komolafe explained further: “What we did as a regulator is to quickly intervene in a situation that could lead to misunderstanding between the producers and the refiners.
“It is our duty as a regulator to ensure that there is energy security in the country, which was exactly what we did at the weekend meeting between both parties.”
Citing Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to ensure a stable supply of crude oil to domestic refineries and strengthen the nation’s energy security, Komolafe was emphatic that the NUPRC will henceforth strictly enforce the policy regarding implementation and defaults by oil companies.
He further explained that significant regulatory actions have already been taken by the Commission, in line with the enabling laws, to enforce compliance with the Domestic Crude Supply Obligation (DCSO).
These actions, Komolafe noted, include the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, as well as the creation of the DCSO framework and procedure guide for implementation.
Consequently, the NUPRC, in a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, the Commission reiterated that diverting crude oil meant for local refineries violates the law.
