The federal government, through the Nigeria Upstream Petroleum Regulatory Commission has secured an agreement with producers to allow the sale of crude oil to local refiners at market prices.
This deal marks the conclusion of a supply issue that has strained relations with international oil companies, according to Nairametric.
The Nigerian Upstream Petroleum Regulatory Commission stated that it could not allow pricing difficulties to impede domestic refining.
The NUPRC stressed its commitment to eliminating “crude supply profiteering,” while also ensuring that oil production stays profitable.
The Chief Executive of the NUPRC Gbenga Komolafe said, “We will never allow price strangulation to disincentivise our domestic refining capacity optimisation.”
He sought monthly cargo price quotes for crude oil supply and delivery from both producers and refiners.
The NUPRC boss underlined that the regulator is responsible for striking a balance between upstream development and a sustainable domestic energy supply chain.
Earlier this year, the NUPRC urged local and international oil companies to prioritize the delivery of crude oil to domestic refineries. The regulator has set a target of 483,000 barrels for local refineries, with the Dangote refinery scheduled to receive 325,000 barrels per day.
Later in April, the NUPRC directed all Nigerian oil corporations to supply crude oil to domestic refineries that were unable to obtain it domestically. Only after completing these domestic supply responsibilities may the companies export crude oil. The Petroleum Industry Act (PIA) requires multinational oil corporations to meet local demand by supplying crude oil to domestic refineries before exporting any surplus.
Meanwhile, the Vice President of Oil and Gas at Dangote Industries Limited (DIL), Devakumar Edwin, accused Nigerian International Oil Companies (IOCs) of deliberately undermining the Dangote Oil Refinery and Petrochemicals.
Edwin said that the IOCs are deliberately impeding the refinery’s efforts to buy local crude by raising premium pricing above market rates. This causes the refinery to purchase oil from faraway countries like the United States, resulting in dramatically higher cost.
