In response to complaints from Dangote Refinery, the Federal Government and crude oil producers have agreed on an inclusive supply framework to cater to both local refining and exports.
The refinery management had repeatedly highlighted the inadequate supply of crude oil to its 650,000 barrels per day (bpd) facility in Lagos. However, under the guidance of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), producers represented by the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI) agreed to a mutually beneficial framework. This agreement aims to ensure local refineries are not burdened with uncompetitive prices.
The commitment was made during a virtual meeting convened by NUPRC’s Chief Executive, Engr. Gbenga Komolafe, to review the status of the Framework for Seamless Operationalisation of Domestic Crude Oil Supply Obligation Template.
The meeting focused on implementing key sections of the Petroleum Industry Act, particularly regarding pricing and crude supply to domestic refineries. Komolafe emphasized the need for a fair pricing model that does not hinder the operations of local refineries. He instructed producers and refiners to provide the regulator with monthly cargo price quotes for crude supply and delivery to ensure effective monitoring and regulation of transactions.
The Domestic Crude Oil Supply Obligation (DCOSO) is aligned with the nation’s energy security goals. Komolafe mentioned that his administration is working to enhance its regulatory processes, aiming for complete transparency in all operations.
