The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has reaffirmed that the country will not interfere in petroleum product pricing and insisted that crude oil transactions must adhere to a willing-seller, willing-buyer framework.
The commission made this known during a stakeholder engagement in Abuja.
The regulatory body said while Nigeria’s domestic crude supply agreements remain in place, local refiners and oil producers must negotiate under market-driven conditions rather than state-imposed price controls.
Nigeria had initiated a deal to supply 400,000 barrels per day (bpd) to Dangote Refinery and 50,000 bpd to other local refiners under the Domestic Crude Supply Obligations (DCSO) framework.
However, inability to meet the agreed quota has forced Dangote Refinery to resort to importation with reports indicating that it may source 140 million barrels from the United States and other suppliers.
The shift comes amid concerns over local production shortfalls despite the government’s commitment to increasing domestic refining capacity.
At the forum, the Commission Chief Executive, Gbenga Komolafe, addressed concerns about the potential revocation of export permits for non-compliant operators.
He clarified that denying export permits for crude oil intended for domestic refining would only apply to companies failing to meet their supply obligations.
“Reference to export permit denial by the commission is not a threat to legitimate industry players but specifically directed at non-compliant operators who may seek shortcuts and breach the law,” Komolafe said.
He reiterated the government’s commitment to protecting investor interests while ensuring compliance with national energy security policies.
Key stakeholders, including representatives from the Oil Producers Trade Section (OPTS) and the Independent Petroleum Producers Group (IPPG), acknowledged the need for regulatory oversight but stressed the importance of balancing compliance with commercial viability.
The commission has developed a template to address supply chain gaps, improve operational efficiency and align producer and refiner interests. Komolafe noted that the approach would leverage collaboration, networking and optimization to enhance industry stability.
The NUPRC reaffirmed that there will be no state-imposed pricing, as long as market conditions remain fair and competitive. Komolafe stressed that Nigeria will not jeopardize energy security or the interests of industry players but will also not compromise on enforcement where necessary.
The commission assured stakeholders that Nigeria’s upstream sector will continue to operate under international best practices with pricing remaining strictly within commercial negotiations between crude producers and refiners.
As the industry navigates the challenges of supply constraints and refining capacity expansion, regulatory clarity is expected to play a crucial role in ensuring a sustainable and investor-friendly petroleum sector.
