NUPRC Bans Crude Exports by Firms Bypassing Local Refineries
The Nigerian Upstream Petroleum Regulatory Commission has said it will not grant export permits to oil companies that fail to meet their domestic crude supply obligations, as part of efforts to strengthen energy security and support local refining operations.
The Chief Executive of the NUPRC, Gbenga Komolafe, who was represented by an official of the Commission, Boma Atiyegoba, made this known on Monday at the second Nigeria Refining Summit held in Lagos.
At the event themed ’Refining – Key to Energy Security in Africa’, Komolafe explained that the NUPRC, in collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, determines the crude requirements of local refiners every six months and ensures that producers meet their supply obligations as mandated by the Petroleum Industry Act.
According to him, the Commission has developed clear regulatory instruments to enforce compliance, stating that companies which fail to supply crude to local refineries will not be cleared to export.
“When that is done, there is a metric that is developed by the Commission and agreed upon by all the stakeholders that is used to allocate the volumes that are expected from the different oil and gas producers for the domestic oil supply obligation,” he said during a panel session.
Komolafe stressed that the crude supply obligation is not a voluntary arrangement but a legal and regulatory requirement designed to improve Nigeria’s energy security.
“Now, this oil supply obligation is not a request; it is a regulatory obligation to help improve our energy security in Nigeria,” the NUPRC boss stated.
He further explained that once allocations are made, the Commission monitors compliance through export permit and vessel clearance controls.
“When we get the allocation, we distribute it accordingly to the companies, and we use parts of their production forecast and other indices to determine the volume that we allocate to the companies.
“When that is done, what we do further is to enforce the obligation. How do we enforce the obligation? The commission has two instruments. Basically, we use what we call an export permit. If you do not fulfil your domestic obligation, we will not allow you to export at any moment of oil and gas production. And we also use vessel clearance to give priority to domestic obligations,” he added.
The regulator said the move was part of ongoing measures to ensure that crude is made available to local refineries such as Dangote, Waltersmith, and other modular refiners, in line with the government’s agenda to achieve self-sufficiency in petroleum products and end fuel importation.
His remarks came amid complaints by the Crude Oil Refinery Owners Association of Nigeria that local refiners continue to face difficulties in accessing crude despite the provisions of the PIA.
CORAN President, Mr. Momoh Oyarekhua, had earlier lamented that the “willing buyer, willing seller” clause in the PIA was undermining the domestic supply obligation, calling for stricter enforcement to ensure that refiners get the feedstock they need to operate.
Oyarekhua stressed that without a consistent crude supply, Nigeria’s refining dream cannot be sustained, saying, “In sustaining refining in Nigeria, there must be crude. There must be the availability of crude.”
The NUPRC, however, maintained that it was committed to implementing the law and ensuring that producers comply fully with their domestic supply mandates before they are allowed to export crude oil.