The Nigerian government, through the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), has reached a landmark agreement with oil producers to supply crude oil to domestic refiners at market prices. This resolution marks the end of a long-standing dispute between the government and international oil companies.
The NUPRC emphasized that it cannot allow pricing issues to hinder domestic refining, committing to prevent “crude supply profiteering” while ensuring oil production remains profitable. To promote transparency, the regulator has requested monthly cargo price quotes from producers and refiners.
Earlier this year, the NUPRC directed local and international oil companies to prioritize crude oil supply to local refineries, setting a target of 483,000 barrels per day. The Dangote refinery, Warri, and Port Harcourt refineries, among others, are expected to benefit from this supply.
The Petroleum Industry Act (PIA) mandates international oil companies to meet local demand by supplying crude oil to domestic refineries before exporting any surplus. However, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, accused international oil companies of inflating prices to undermine the Dangote Oil Refinery and Petrochemicals.
The agreement is expected to boost domestic refining capacity, reducing Nigeria’s reliance on petrol imports. The 650,000 barrels per day Dangote refinery is seen as a game-changer in achieving this goal. With this resolution, the government has taken a significant step towards ensuring a sustainable domestic energy supply chain.
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