In a decisive move to address Nigeria’s crude oil supply challenges, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a stern warning to oil companies, declaring that export permits will be denied for crude oil cargoes meant for domestic refineries. This crackdown follows the consistent failure of oil producers to meet the Domestic Crude Supply Obligation (DCSO), a policy designed to ensure local refineries receive adequate feedstock.
In a statement released in Abuja, the Commission stressed that any crude oil allocated for domestic use must not be diverted for export without explicit approval from the Commission Chief Executive (CCE), Engr. Gbenga Komolafe.
In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, Engr. Komolafe reiterated that diverting crude oil intended for local refining constitutes a violation of the Petroleum Industry Act (PIA) 2021. The Act mandates a stable crude oil supply to local refineries, reinforcing Nigeria’s energy security.
At a high-level meeting attended by over 50 key industry stakeholders, tensions flared as both refiners and producers blamed each other for lapses in implementing the DCSO policy. Refiners accused producers of deliberately sidestepping supply commitments in favor of more lucrative international markets, leaving local refineries struggling to source feedstock. On the other hand, producers countered that refiners often failed to meet commercial and operational terms, forcing them to seek alternative buyers.
The NUPRC has now set clear boundaries to prevent further breaches. The regulator warned refiners to adopt international best practices in procurement and operations, while cautioning producers against unilaterally altering crude allocation terms. Any deviation from the stipulated DCSO policy must receive express approval from the Commission to avoid regulatory sanctions.
Engr. Komolafe emphasized that NUPRC has already taken significant regulatory steps to enforce compliance, including:
The development and enforcement of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023
The establishment of a DCSO framework and procedural guide for effective implementation
Nigeria’s Energy Security at Stake
With local refineries expected to play a pivotal role in stabilizing fuel supply and reducing dependence on imported petroleum products, the NUPRC’s latest stance signals a zero-tolerance policy on crude oil diversions. Industry players are now on notice: any failure to meet domestic supply commitments will attract severe regulatory consequences.
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