The Nigerian Upstream Petroleum Regulatory Commission says Dangote refinery and other local crude oil refining facilities in the country have been complaining of lack of feedstock.
Consequently, the NUPRC Chief Executive, Gbenga Komolafe, has instructed the commission’s enforcement committee to develop a template for the seamless implementation of the Domestic Crude Oil Supply Obligation before Friday.
According to a statement on Wednesday, Komolafe gave the directive at a meeting to review the DCSO, as provided in Section 109 (2) of the Petroleum Industry Act 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 statement read.
Komolafe, 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 laycans 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 the fuel 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 parts, the representatives of the Oil Producers Trade Section and Independent Petroleum Producers Group, were said to have 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.
The According reports that the government-ownedPort Harcourt refinery would start operations in April, according to the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari.
Earlier, the Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, had raised the concern that the refineries may not get the required feedstock unless the country ramps up productions and get enough investments in the oil sector.
The country’s daily oil production hovers around 1.4mbpd as of February 2024, even as the sector grapples with massive oil theft and vandalism.
The Dangote refinery announced in January that it had started the production of diesel and aviation fuel, but the products have yet to hit the market.
