Nigeria Reaches Oil Supply Deal, Ending Dispute with Producers
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has struck a deal with oil producers to allow the sale of crude to domestic refiners at market prices, effectively ending a supply dispute that had strained relations with international oil companies. This agreement comes as a significant relief, as Nigeria relies heavily on imports for most of its fuel needs due to inadequate refining capacity.
A major development in Nigeria’s refining landscape is the 650,000 barrel-a-day refinery built by Africa’s richest man, Aliko Dangote, which has been operational since February. This refinery is expected to make Nigeria self-sufficient in fuel production and enable exports. The recent agreement follows complaints from the Dangote Refinery that oil majors were hindering local crude purchases by demanding excessive premiums or claiming they had no available supplies.
The NUPRC stated it could not allow pricing issues to impede domestic refining. “We will never allow price strangulation to disincentivize our domestic refining capacity optimization,” said NUPRC Chief Gbenga Komolafe after talks with the Oil Producers Trade Section (OPTS). Komolafe emphasized that the regulator would work to prevent crude supply profiteering while also ensuring that oil production remains profitable.
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To ensure transparency, Komolafe requested monthly cargo price quotes on crude oil supply and delivery from both producers and refiners. He stressed that it was up to the regulator to balance upstream development with a sustainable domestic energy supply chain.
In March, the NUPRC chief met with oil producers and refiners to address the refineries’ lack of access to locally produced crude oil. The OPTS had no immediate comment on the recent agreement.
