By Milcah Tanimu

The federal government of Nigeria, through the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), has successfully negotiated an agreement with oil producers to allow the sale of crude oil to domestic refiners at market prices. This agreement resolves a longstanding supply dispute that has affected relations with international oil companies.

The NUPRC emphasized that pricing issues should not be a barrier to domestic refining. The commission remains committed to preventing “crude supply profiteering” while ensuring that oil production remains profitable.

Gbenga Komolafe, Chief Executive of the NUPRC, highlighted the importance of balancing upstream development with a sustainable domestic energy supply chain. To ensure transparency, the NUPRC will require monthly cargo price quotes on crude oil supply and delivery from both producers and refiners.

Earlier this year, the NUPRC directed both local and international oil companies to prioritize crude oil supply to local refineries. The target was set at 483,000 barrels per day, with the Dangote refinery expected to receive 325,000 barrels daily. Other beneficiaries include the Warri and Port Harcourt refineries, receiving 75,000 and 54,000 barrels per day respectively, while smaller refineries such as Waltersmith, OPAC, and Niger Delta Petroleum Refinery will receive 10,000 barrels per day or less.

In April, the NUPRC mandated that all oil companies in Nigeria must supply crude oil to domestic refineries unable to source it locally before exporting any surplus. This directive is in line with the Petroleum Industry Act (PIA), which prioritizes local demand.

Last month, Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), accused International Oil Companies (IOCs) in Nigeria of attempting to undermine the Dangote Oil Refinery and Petrochemicals by inflating premium prices above market rates. This has forced the refinery to import crude from distant countries, such as the United States, at higher costs.

Nigerians have high expectations for the 650,000 barrels per day Dangote refinery to significantly reduce or end the country’s petrol import dependence, especially in the post-subsidy removal era.