NUPRC to develop template for enforcement of Domestic Crude Supply Obligation

Oritsegbubemi Omatseyin

Lagos — The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, has instructed its enforcement committee to develop a template for the seamless implementation of the Domestic Crude Oil Supply Obligation, DCSO, within 48 hours.

The directive was given by the  Chief Executive Officer of NUPRC, Engr. Gbenga Komolafe, at a meeting to review the DCSO, as provided in Section 109 (2) of the Petroleum Industry Act, PIA, 2021.

With the mandate to address issues related to crude supply regulation and enforcement, Komolafe stressed the importance of prioritising the supply of feedstock to local refineries and addressing complaints from oil producers and Dangote Refinery within the stipulated period.

The NUPRC boss, who outlined challenges such as the failure to consider legal provisions in contractual agreements, reluctance of some companies to allocate production to domestic refineries, changes in vessel nomination, delays in vessel arrival and frequent changes in lay-cans for crude oil allocated to domestic refineries, emphasised government’s commitment to make Nigeria a net exporter of refined petroleum products.

While calling on producers to fulfill their domestic crude oil supply to domestic refineries, Komolafe reechoed the need to develop a robust domestic refining capacity as the country transits away from subsidy regime.

Having expressed concerns about the limited crude oil supply to local refiners over the years, some refinery owners appealed to the government to resolve the issue of currency for payments for crude oil supplied to local refineries, adding that meeting the demands of local refineries require additional investment to boost production.

On their part, the representatives of the Oil Producers Trade Section, OPTS, and the Independent Petroleum Producers Group, IPPG, both stressed the urgent need for the government to address the challenges facing the industry.

During the meeting, it was revealed that Oil production in 2024 failed to meet the budgetary target of 1.78 million barrels per day, thereby raising concerns about the feedstock supply to local refineries, especially as quite a number are scheduled to come on stream.