February 03, (THEWILL) – The Nigerian Upstream Petroleum Regulatory Commission has issued a stern warning to oil producers, cautioning them against diverting crude oil cargoes designated for domestic refineries.
In a letter dated February 2, 2025, and addressed to exploration and production companies as well as their equity partners, the NUPRC’s Chief Executive, Gbenga Komolafe, stressed that such diversions violate the provisions of the Petroleum Industry Act 2021.
“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 cargoes intended for domestic refining,” the letter read.
Komolafe made it clear that the Commission will deny export permits to oil companies that fail to meet their Domestic Crude Supply Obligation, signaling a shift towards stricter enforcement of regulations aimed at ensuring a steady supply of crude to local refineries.
The NUPRC’s directive comes amid growing tensions between oil producers and local refiners over the implementation of the DCSO policy. While refiners accuse producers of prioritising exports at the expense of domestic supply, producers argue that refiners often fail to meet commercial and operational requirements, forcing them to seek alternative markets to avoid operational bottlenecks.
The commission warned against further breaches from either party, urging refiners to adopt international best practices in procurement and operational activities.
It also reminded producers that any variation in the conditions outlined in the DCSO policy requires express approval from the Commission’s Chief Executive before crude can be sold outside the agreed framework.
Komolafe referenced Section 109 of the Petroleum Industry Act (PIA) 2021, which mandates the consistent supply of crude oil to domestic refineries as part of efforts to enhance Nigeria’s energy security and reduce dependence on imported petroleum products.
“The PIA provides a clear legal framework to ensure that domestic refineries have sufficient crude oil to support their operations. Any deviation from this obligation undermines the objectives of the Act and the country’s energy security,” Komolafe emphasised
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