The Federal Government and Nigeria’s crude oil producers have agreed to secure a sustainable supply of crude oil to local refineries under a market-determined pricing system. This agreement aims to balance optimal business operations for producers while ensuring refineries receive consistent feedstock.
During a meeting called by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI) consented to a mutually beneficial framework. This framework is designed to prevent local refineries from being impacted by unfavorable prices. The focus was on reviewing the Framework for Seamless Operationalisation of the Domestic Crude Oil Supply Obligation Template.
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The meeting, led by Commission Chief Executive Engr. Gbenga Komolafe, emphasized implementing key sections of the Petroleum Industry Act (PIA) 2021, particularly regarding pricing and crude supply to domestic refineries. Komolafe stated that President Bola Ahmed Tinubu is committed to providing a fair business environment for producers and refiners, stressing the need for transparent price quotes on crude supply for effective monitoring.
Komolafe highlighted the importance of the Domestic Crude Oil Supply Obligation (DCOSO) in ensuring energy security. He assured that the NUPRC is re-engineering its regulatory processes to address existing challenges and maintain transparency. The regulator aims to enforce a willing buyer/willing seller provision while preventing price manipulation that could harm domestic refining capacity.
The NUPRC is dedicated to attracting investment for upstream development and optimizing hydrocarbon resources, ensuring the sustainability of domestic energy supply in the midstream and downstream sectors.
