The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that several oil producers resisted federal government directives last year to allocate part of their crude oil output to domestic refineries, including the Dangote Petroleum Refinery. According to the commission’s newly released report, companies under the Independent Petroleum Producers Group (IPPG) and the Oil Producers Trade Section (OPTS) submitted formal letters either requesting waivers or explaining their inability to meet monthly quotas set under the Domestic Crude Supply Obligation (DCSO).
Despite the gazetting of the DCSO regulation in September 2023 and multiple industry engagements, resistance from oil producers persisted. The NUPRC said it employed various strategies to enforce compliance, including the use of the monthly production curtailment platform in February 2024 to coordinate crude supply to domestic refiners. It also requested copies of all active crude sales and purchase agreements from producers to assess how those deals may impact local supply.
To further support implementation, the commission established a working group in March 2024 that included representatives from producers, refinery owners, the Nigerian National Petroleum Company Limited (NNPCL), and other key stakeholders. This committee developed a framework for the equitable allocation of crude, considering each producer’s historical and projected capacity. Final DCSO guidelines, endorsed by NUPRC Chief Executive Gbenga Komolafe in July 2024, set obligations for companies producing more than 3,000 barrels per day.
However, the commission faced additional friction in August 2024, when oil producers objected to the participation of refiners in production curtailment meetings. In response, NUPRC disinvited refiners from the sessions, citing industry discomfort. Nevertheless, the regulator confirmed that it continued facilitating crude delivery to local refineries, including Dangote’s, and received updates from NNPCL on the crude supply status, underscoring its commitment to the DCSO policy despite industry pushback.
