The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has issued a stern directive to exploration and production companies, emphasizing the importance of adhering to their Crude Oil Supply Obligations for local refineries. The commission stated that any company found failing to meet its domestic crude supply commitments would face serious consequences, including the denial of export permits for crude oil cargoes meant for domestic refining.
The new measure, outlined in a circular issued by NUPRC’s Public Affairs Unit on Monday, seeks to ensure that oil companies fulfill their obligations to supply adequate crude oil to domestic refineries. The commission also stressed that any changes to cargoes designated for domestic refining must receive express approval from the Commission’s Chief Executive, Gbenga Komolafe, in accordance with the guidelines stipulated by the Petroleum Industry Act (PIA) of 2021.
This directive follows rising concerns among local refiners, including the Dangote Petroleum Refinery, about the challenges they face in securing a steady supply of crude oil. The Dangote refinery, which is expected to process 550,000 barrels of oil per day (bpd) and 17.05 million barrels per month in the first half of 2025, has reportedly experienced difficulties in obtaining the required quantities. According to sources, some suppliers have even demanded partial payments in US dollars, further complicating the procurement process.
In his letter to exploration and production companies and their equity partners, NUPRC’s Chief Executive, Gbenga Komolafe, reiterated the legal requirement that crude oil intended for domestic refineries must not be diverted for export. Komolafe highlighted that this practice violates Section 109 of the Petroleum Industry Act, which aims to ensure a stable supply of crude oil to local refineries and strengthen Nigeria’s energy security. To enforce this policy, NUPRC has committed to taking decisive regulatory actions and penalizing companies that do not comply with their domestic crude supply obligations.
To further ensure compliance, the commission has implemented various measures, including the development and signing of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023. Additionally, the NUPRC has established the Domestic Crude Supply Obligation (DCSO) framework and procedures to guide the implementation of this policy. Komolafe emphasized that the diversion of crude oil designated for local refineries without express approval would not be tolerated, warning that the commission would disallow export permits for such cargoes going forward.
Despite the regulatory measures in place, tensions have emerged between refiners and producers. Both parties have pointed fingers at each other for the ongoing supply inconsistencies. Refiners claim that producers are not meeting their supply commitments, preferring to sell crude oil abroad instead of meeting local demand. On the other hand, producers argue that refiners are not adhering to agreed commercial and operational terms, prompting them to explore other markets to avoid operational disruptions.
To address these issues, a stakeholder meeting was held over the weekend, attended by over 50 key industry players, where both refiners and producers aired their grievances. Although both parties have acknowledged the regulator’s efforts to enforce the DCSO policy, they expressed frustrations over the implementation of the regulations.
Moving forward, NUPRC has warned that further breaches from either party will not be tolerated. The commission urged refiners to comply with international best practices in procurement and operations, while reminding producers that any changes to the DCSO policy conditions must be approved by the CCE before crude oil can be sold outside of the agreed framework. The CCE emphasized that non-compliance with the domestic crude supply regulations poses a serious threat to Nigeria’s energy security, and further violations will be met with swift penalties.