NUPRC Cracks Down on Oil Producers Over Domestic Supply Violations
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a strong warning to oil producers and refiners, stating that it will deny export permits for crude oil cargoes meant for domestic refining if companies fail to meet their local supply obligations.
The commission emphasized that any change in crude cargoes designated for domestic refining must receive express approval from its Chief Executive.
In a statement released by its Public Affairs Unit, NUPRC disclosed that its Chief Executive, Engr. Gbenga Komolafe, had issued a letter on February 2, 2025, to exploration and production companies, stressing that diverting crude meant for local refineries violates the law.
At a recent meeting involving over 50 key industry players, refiners and producers blamed each other for the inconsistencies in implementing the Domestic Crude Supply Obligation (DCSO) policy.
Refiners claimed that producers failed to meet supply terms and preferred selling crude abroad, forcing them to seek alternative feedstock. Producers argued that refiners often failed to meet commercial and operational agreements, leaving them with no choice but to explore other markets.
The regulator cautioned both parties against further breaches, urging refiners to follow international best practices and warning producers against altering DCSO conditions without express approval.
Komolafe referenced Section 109 of the Petroleum Industry Act (PIA) 2021, which mandates crude oil supply to local refineries, reinforcing Nigeria’s energy security.
He stated that strict enforcement would now follow, adding that the Commission has already implemented the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, along with a comprehensive DCSO framework and procedure guide.
NUPRC reiterated its commitment to monitoring compliance with production metrics through monthly meetings with upstream operators. The commission now tracks crude supply availability two months in advance to ensure commitments to local refineries are met.
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Komolafe made it clear that violations would no longer be tolerated:
“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.”
With this decisive stance, NUPRC aims to stabilize local crude supply, ensuring Nigeria’s refineries receive adequate feedstock for sustainable operations.
