NUPRC Defends Crude Oil Supply Enforcement Amid Dangote Refinery Criticisms, Highlights Compliance with PIA

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has responded to allegations from Dangote Refinery, rejecting claims that it has been complacent in enforcing the Domestic Crude Supply Obligation (DCSO) under the Petroleum Industry Act (PIA) 2021. 

In a press statement released on Friday, the regulator highlighted its commitment to ensuring the steady supply of crude oil to local refineries, particularly the Dangote Refinery, amidst ongoing challenges in the oil and gas sector.

The controversy erupted when Dangote Refinery, Africa’s largest refinery, publicly criticised the NUPRC and the Nigerian National Petroleum Company Ltd (NNPC) for failing to meet its crude oil supply requirements. 

The refinery’s management initially alleged that the NUPRC had not adequately enforced the Domestic Crude Supply
Obligation, resulting in significant shortfalls. Specifically, Dangote Refinery claimed that the NNPC had supplied only 33% of the crude oil it was supposed to deliver, causing operational disruptions.

However, the NUPRC, in its statement, countered these claims, stating that it had facilitated the supply of over 29 million barrels of crude oil to the Dangote Refinery within the first half of 2024. 

The regulator stressed that it has been proactive in its enforcement of Section 109 of the PIA, which mandates the domestic supply of crude to local refineries on a ‘willing buyer, willing seller’ basis.

The NUPRC rejected insinuations that it has poorly enforced the DCSO, saying that it had ensured that nine refineries, including Dangote, are supplied crude despite low crude oil production.

The NUPRC also quoted a letter from Dangote Refinery’s Chairman, Aliko Dangote, dated 24 July 2024, commending the Commission for its enforcement efforts.

“Let me once again commend you and your team for the successful development of the domestic crude supply obligation (DCSO) framework. This framework will lay the foundation for ensuring a stable and reliable supply of crude oil to local refineries,” Dangote was quoted as saying in the letter.

The NUPRC further outlined the steps it has taken to ensure compliance with the PIA, including the development of the Production Curtailment and Domestic Crude Oil Supply Obligation Regulation 2023, and the establishment of a working committee comprising stakeholders such as the Oil Producers Trade Section (OPTS) and the Crude Oil Refinery-Owners Association of Nigeria (CORAN).

The Commission also addressed concerns about potential license withdrawals, emphasising that while it would enforce compliance, it would not engage in “presumptuous and arbitrary” actions that could deter investment in the sector.

 “The regulator, as a subject matter expert, is of the opinion that arbitrary revocation of licenses is not in the best interest of the country, particularly in the era of low investment arising from the onslaught in energy transition,” the NUPRC stated.

Ozioma Samuel-Ugwuezi, Chioma Kalu

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