The Nigerian Upstream Petroleum Regulatory Commission NUPRC has issued stern directives to oil exploration and production companies demanding strict compliance with crude oil supply obligations to refineries in the country.
The commission, in a circular issued by its Public Relations Division on Monday, warned that it would deny export licences for crude oil cargoes destined for refineries in the country if the companies fail to meet their delivery obligations.
Additionally, it said that the Commission’s Chief Executive must specifically approve any modifications to cargoes designated for domestic refining.
The directive comes after local refiners, particularly Dangote Refinery, complained about their inability to obtain sufficient crude supply, which raised questions about Nigeria’s energy security.
According to NUPRC data, Dangote Refinery is expected to process 550,000 barrels per day and 17.05 million barrels per month in the first half of 2025.
However, sources at the refinery claim that the government has not met this demand, with suppliers demanding partial payment in U.S. dollars.
In a February 2, 2025 letter addressed to exploration and production companies, NUPRC’s Commission Chief Executive, Gbenga Komolafe, reiterated that diverting crude meant for domestic refining is illegal.
Citing Section 109 of the Petroleum Industry Act 2021, which mandates a stable supply of crude oil to local refineries, Komolafe warned that the commission would now strictly enforce the policy and penalize defaulters.
He noted that NUPRC has already taken significant regulatory actions to ensure compliance, including the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023 and the development of a DCSO framework and implementation guide.
“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,” the letter read.
“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,” Komolafe added.
A stakeholders’ meeting held last weekend, attended by over 50 key industry players, exposed tensions between oil producers and refiners over the implementation of the Domestic Crude Supply Obligation (DCSO) policy.
Refiners accused oil producers of preferring to export crude rather than meet local supply commitments, forcing them to seek alternative feedstock sources.
Oil producers were accused by refiners of choosing to export crude instead of fulfilling local supply obligations, which compelled them to look for alternate sources of feedstock.
However, producers contended that exports were an essential alternative because refiners frequently failed to meet commercial and operational criteria, but the commission warned that neither party will commit any more violations.
It reminded oil producers that any modifications to DCSO agreements require prior CCE approval and recommended refiners to follow global best practices in operations and procurement.
Komolafe warned that non-compliance jeopardises Nigeria’s energy security and emphasised that NUPRC will no longer accept infractions of domestic crude supply laws.
