The Nigeria Upstream Petroleum Regulatory Council has issued new regulations requiring oil producers to send around 483,000 barrels per day of crude oil to nearby refineries during the first half of 2024.
This program is part of the efforts of Africa’s largest crude oil exporter to secure a steady supply for domestic processing.
The Dangote oil refinery and at least three government-run refineries are among the local refineries set to begin operations in 2024.
According to the Nigerian Upstream Petroleum Regulatory Commission’s recently announced Domestic Crude Supply Obligation criteria, the 650,000-barrel-per-day Dangote refinery is slated to earn the largest portion, with a volume of 325,000 bpd.
According to the Nigeria Upstream Petroleum Regulatory Council, six refineries with a combined refining capacity of 864,500 barrels per day are expected to begin operations in 2024. As a result, oil producers will be required to supply somewhat more than half of the crude required to meet these processing capacities.
Warri and Port-Harcourt refineries, for example, are expected to receive 75,000 and 54,000 barrels of crude oil daily, respectively, from the crude oil supply. Meanwhile, refineries like Waltersmith, OPAC, and Niger Delta Petroleum Refinery, among others, are expected to get 10,000 bpd or less.
The Petroleum Industry Act, adopted in 2021, included a provision requiring Nigerian oil producers to allocate a percentage of their crude to domestic refineries to avoid shortages. This regulation, however, has not yet been applied.
Following the termination of the fuel subsidy in June, Nigeria has been attempting to reduce imports of petroleum products while keeping prices reasonably low. After the subsidy was removed in June, the price of petrol increased by more than 200%.
Despite the fact that the NNPCL’s CEO claimed in a June interview that local refining will not considerably cut fuel prices across the country post-subsidy. He expressly said that the cut will range from N20 to N30 from the imported fuel.
Since 2021, the country has used foreign contractors to renovate its state-owned refineries and has assisted the private sector in the construction of others. The Dangote refinery was inaugurated in May, but it has yet to begin refining despite receiving oil earlier this month.
In addition, the former Port-Harcourt refinery’s turnaround maintenance has been finished, and it will begin refining 60,000 barrels of oil per day in January 2024.
