The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has urged oil producers to ensure an adequate supply of crude oil to local refineries in the country.
Gbenga Komolafe, the chief executive, NUPRC stated this in Abuja on Tuesday, during a meeting with oil producers to review the domestic crude oil Supply obligation as contained in Section 109 (2) of the Petroleum Industry Act, PIA 2021.
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According to the chief executive, “Producers should satisfy their domestic crude oil supply to the domestic refineries so that as a nation we seize the opportunity to reverse the ugly trend by ensuring that we develop our midstream and end being a net exporter of petroleum products, especially now that we are trying to exit the subsidy regime. The only way to sustain that is to become robust in our domestic refining capacity.
He explained that issues, including an inability to factor in the provisions of the law while executing contractual agreements has been identified as a challenge requiring the attention of the government. This according to him has resulted in some companies being reluctant to allocate a portion of their production to domestic refineries.
Other issues include a change in vessel nomination under 24 hours, inability to provide the required financial instrument/backing before loading, delay in the expected time of arrival of vessels resulting in production cut which is inimical to our national budgetary targets, the frequent change in laycans for crude oil allocated to domestic refineries and delays at loading terminals after the arrival of the loading vessel.
According to Komolafe, the commission expects the issue to be resolved in the next 48 hours, stressing the complaints made by the producers were being taken seriously.
“We monitored the challenges and in that respect, we set up the industry committee. The essence of the committee is to be able to distil the challenges of both the producers as well as the refiners in a manner that we can proactively resolve these issues in a manner that will not jeopardise production as well and will help us to achieve the objective of developing our and meeting our mid and downstream.
“The committee will come with a clear template that will drive smooth, seamless implementation of the domestic crude oil supply obligation in Nigeria, as provided under section 109 of the PIA,” he said.
In his remarks, representatives of the Oil Producers Trade Section, and Independent Petroleum Producers Group, said the government has to address the challenges facing the industry.
IMomoh Oyarekhua, chairman, OPAC Refinery, who spoke on behalf of the Independent Petroleum Producers Group, decried that the local refineries have received almost no crude oil from producers in the past three years.
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According to him, OPAC refinery with a refining capacity of 10,000 barrels per day, received only 1,500bpd in 2022.
He also stressed that there was a need for the government to resolve the issue of payment in dollars as requested by producers.
