The Nigerian Government and the International Oil Producers (IOCs) in Nigeria have committed to working towards a sustainable supply of crude oil to Dangote Refinery and other local refineries (Modular Refineries) under a market-determined pricing system.
The parties said the aim of the commitment was to ensure that while the operators (crude oil producers) do business optimally, the refineries are not starved of feedstock.
The Nigeria Upstream Petroleum Regulatory Commission has therefore directed oil refiners in Nigeria to provide monthly price quote on crude supply.
According to the report by Punch newspaper on Friday, this development followed reports that the $20bn Dangote Petroleum Refinery was reportedly ramping up the importation of crude from the United States.
The report added that the Nigeria’s upstream regulator in a statement in Abuja on Thursday, stated that oil producers under the umbrella of the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry, at a meeting called by NUPRC, agreed to concede to a framework that would be mutually beneficial with the aim of ensuring that local refineries are not strangulated due to off-the-curve prices.
“The focus of the meeting held at the instance of the Commission Chief Executive, Gbenga Komolafe, was on the status review of the Framework for Seamless Operationalisation of Domestic Crude Oil Supply Obligation Template.
“It was part of efforts to effectively implement key sections of the Petroleum Industry Act (PIA) 2021, especially the issue of pricing and crude supply to the domestic refineries,” the commission said.
The statement also said that President Bola Tinubu was fully committed to providing a level playing ground for producers and refiners to do business in the industry.
Komolafe expressed the need for a rule of engagement to ensure that the pricing model from the oil producers does not hinder the domestic refineries.
He directed producers and refiners to provide the NUPRC with cargo price quotes on crude supply and delivery for effective monitoring and regulation of transactions among parties. “We need to have the price quotes monthly,” he directed.
The NUPRC boss pointed out a convergence between the Domestic Crude Oil Supply Obligation and the nation’s energy security, indicating that his team is re-engineering its regulatory processes to address the challenges.
“We allow all our processes to be transparent. While the Federal Government targets the implementation of the regulation, all parties must submit to the rules of engagement as a guide for operation,” the report quoted Komolafe as saying.
GIK/APA
Nigerian Govt, IOCs agree on crude supply to Dangote Refinery, other refiners
