The Federal Government has placed a ban on the export of crude oil designated for domestic refineries, warning that violations will attract regulatory sanctions.
This decision follows reports that approximately 500,000 barrels of crude oil per day, meant for local refining, have been diverted to the international market by producers and traders seeking quick foreign exchange gains.
Acting through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the government stated that it will no longer grant export permits for crude cargoes intended for domestic refining.
Any alteration to cargo designations must receive direct approval from the commission’s Chief Executive Officer.
In a letter dated February 2, 2025, addressed to exploration and production companies and their equity partners, NUPRC’s Chief Executive Officer, Engr. Gbenga Komolafe, emphasized that diverting crude meant for local refineries violates Nigeria’s petroleum laws.
During a recent industry meeting attended by over 50 key players, refiners and producers exchanged blame over inconsistencies in implementing the Domestic Crude Supply Obligation (DCSO) policy.
Refiners accused producers of failing to meet supply terms and instead selling crude abroad, while producers claimed that refiners often failed to meet commercial and operational requirements, forcing them to seek alternative markets.
Despite their disagreements, stakeholders acknowledged the regulator’s role in ensuring compliance and agreed on measures for effective policy implementation.
The NUPRC cautioned against further breaches and urged refiners to uphold international best practices in procurement and operations.
Producers were also reminded that any deviation from the DCSO policy requires express approval from the commission before selling crude outside the agreed framework.
Komolafe cited Section 109 of the Petroleum Industry Act (PIA) 2021, which mandates a stable crude supply to domestic refineries to enhance Nigeria’s energy security.
He affirmed that the commission would strictly enforce the policy, taking necessary regulatory actions against defaults