February 4, 2025
In a bid to boost local refining capacity, reduce the importion of refined petroleum products and curb pressure on foreign exchange supply, the Federal Government has banned the export of crude oil meant to meet the needs of domestic refineries in the country.
It was observed that, about 500,000 barrels of crude oil per day meant for domestic refining have been finding their way to the international market as producers and traders shortchange the policy for quick foreign exchange proceeds.
Acting through the upstream sector regulator, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, the government of has warned that it will nolonger grant export permits for crude oil cargoes intended for refining domestically.
NUPRC, in a statement in Abuja, insisted that it chief executive must grant express approval to any changes to cargoes designated for domestic refining.
In a letter addressed to exploration and production companies and their equity partners, dated February 2, 2025 NUPRC Chief Executive Officer, Engr. Gbenga Komolafe said diverting crude oil meant for local refineries is a violation of Nigeria’s extant laws.
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Last weekend, both refiners and producers blamed each other at a meeting attended by more than 50 critical industry players, for the inconsistencies in the implementation of the Domestic Crude Supply Obligation, policy.
While refiners claimed that producers are not meeting supply terms and preferred to sell crude outside, forcing them to look elsewhere for feedstock, producers countered that refiners hardly meet commercial and operational terms, forcing them to explore other markets elsewhere to avoid unnecessary operational bottlenecks.
They, however, agreed that the regulator has put in place appropriate measures for effective implementation of the law.
The regulator cautioned against any further breaches from either party, and advised refiners to adhere to international best practices in procurement and operational matters.
