Nigerian Upstream Petroleum Regulatory Commission states that Dangote refinery and other local crude oil refining facilities in the country have been complaining of not having enough raw material.
As a result, the NUPRC Chief Executive, Gbenga Komolafe, has directed the enforcement committee of the commission to create a blueprint for the smooth implementation of the Domestic Crude Oil Supply Obligation before Friday.
A statement on Wednesday mentioned that Komolafe gave the instruction during a meeting to assess the DCSO, as outlined in Section 109 (2) of the Petroleum Industry Act 2021, with the task of dealing with issues concerning the regulation and enforcement of crude supply.
Komolafe emphasized the importance of giving priority to the supply of raw materials to local refineries and addressing grievances from oil producers and Dangote Refinery within the specified timeframe,
Komolafe, who highlighted challenges such as not considering legal provisions in contracts, 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, stressed the government’s dedication to making Nigeria a net exporter of refined petroleum products.
While urging producers to fulfill their domestic crude oil supply to domestic refineries, Komolafe reiterated the need to develop a strong domestic refining capacity as the country moves away from the fuel subsidy system.
Having expressed concerns about the limited supply of crude oil 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.
Representatives of the Oil Producers Trade Section and Independent Petroleum Producers Group stressed the urgent need for the government to address the challenges facing the industry.
It was revealed during the meeting that oil production in 2024 did not meet the budgetary target of 1.78 million barrels per day, raising concerns about the supply of raw materials to local refineries, especially as a significant number are scheduled to start operations.
The PUNCH reports that the government-owned Port Harcourt refinery would commence operations in April, according to the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari.
Previously, the Minister of State Petroleum Resources (Oil), Heineken Lokpobiri, expressed concern that the refineries may not obtain the required raw materials unless the country increases production and secures sufficient investments in the oil sector.
The country’s daily oil production was around 1.4 million barrels per day as of February 2024, while the sector grapples with widespread oil theft and vandalism.
Dangote refinery announced in January that it had commenced the production of diesel and aviation fuel, but the products are yet to be available in the market.
