BREAKING: NUPRC Vows Strict Enforcement Of Domestic Crude Supply To PH, Warri, Dangote, Other Refineries
The Commission Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe has vowed to enforce Domestic Crude Supply Obligations to local refineries.
The NUPRC boss said the commission will explore every tool within the law to ensure that local refineries get crude oil supply in line with the Petroleum Industry Act 2021.
Komolafe said these during a meeting with members of the Oil Producers Trade Section (OPTS) and the Independent Petroleum Producers Group (IPPG) to address issues related to domestic crude supply obligations between producers and refiners.
Some of the issues raised at the meeting were around operational challenges regarding pre-allocation of crude oil to domestic refiners, pre-existing contracts amid domestic crude supply obligations and pricing.
Komolafe clarified that the NUPRC is concerned about the commercial interests of all stakeholders while ensuring that the upstream sector operates effectively within established laws.
The NUPRC boss explained that the NUPRC as a regulator is cautious of arbitrary actions that could dissuade operators or hinder investments in the upstream sector.
THE WHISTLER had reported in January that the NUPRC estimated daily crude oil requirements for local refiners at 770,500 barrels per day and a monthly requirement of 23,812,000 barrels per month.
Port Harcourt Refinery, Dangote Refinery, Warri Refinery and other functional refineries will receive 123,480,500 barrels of crude oil between January to June 2025 which is the total crude requirement of refiners during the period.
In the same month, the NUPRC outlined a five-point agenda that would aid increased oil production in 2025.
The agenda includes, “Effectively implementing initiatives to boost production by one million barrels, enhancing the transparency and accuracy of hydrocarbon measurement through metering and cargo regulations, digitalising upstream regulatory activities for better compliance, optimising unit costs per barrel to increase revenue and conducting licensing bid rounds to revitalise non-performing assets in line with the provisions of the Petroleum Industry Act (PIA) 2021.”
Explaining further, Komolafe said the NUPRC has developed a template to identify the needs of every participant within the value chain.
“This template aims to address gaps by leveraging the capabilities of different players, thus fostering collaboration, networking and operational optimization,” he said.
The NUPRC had announced significant regulatory actions to enforce compliance with the Domestic Crude Supply Obligation (DCSO).
Some of the regulatory actions include the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023 along with the implementation of a DCSO framework and procedure guide.
Recall that the NUPRC had emphasized that it would strictly enforce policies regarding implementation and defaults by oil companies and would not hesitate to deny export permits for crude oil intended for domestic refining if companies fail to meet their obligations.
But Komolafe clarified that the “Reference to export permit denial was not a threat to legitimate industry players, but specifically directed at non-compliant operators who may seek shortcuts, and in breach of the law.”
According to him, the government is committed to protecting the interests of investors but will not compromise on issues that could jeopardise energy security or undermine national interests.
He emphasised the government’s stance on not interfering with product pricing, as long as prices remain reasonable and fair.
Komolafe also maintained that the NUPRC is committed to the ‘willing-seller, willing-buyer option which aligns with international best practices and affirmed that government would support the upstream sector’s optimal functioning without resorting to price-fixing.
