Nigeria’s upstream oil regulator said on Monday it would deny export permits for oil cargoes from producers who fail to meet their stipulated supply quota to local refineries, including the Dangote Refinery, Africa’s largest.
Nigeria’s oil industry law, the Petroleum Industry Act, mandates oil producers, including international oil companies, to dedicate specific volumes of crude for domestic refineries before exporting, a requirement called the domestic crude supply obligation.
However, oil producers say they have not complied with this stipulation because refiners are not offering competitive prices. This has prompted the Dangote Refinery to call on the regulator to enforce the law.
A statement on Monday from the Nigerian Upstream Petroleum Regulatory Commission said Gbenga Komolafe, its head, wrote to oil exploration and production companies to remind them of their obligations and penalties for default.
The commission said it met last week with producers and refiners. In the meeting, refiners blamed producers for not honouring their obligations under the supply obligation, while the producers said refiners are offering insufficient prices, forcing them to explore other markets, Komolafe said in the statement.
Komolafe warned “the diversion of crude cargo designated for domestic refineries is a contravention of the law and the Commission will henceforth disallow export permits for designated crude cargos for domestic refining.”
For the first half of 2025, Nigerian refineries say they will require 770,500 barrels of crude per day, with the Dangote Refinery forecast to require 550,000 bpd, according to a schedule published by the oil regulator.
