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Nigeria to Block Export Permits for Oil Producers Failing to Meet Local Refinery Quotas

Published by admin on February 4th, 2025.

Nigeria to Block Export Permits for Oil Producers Failing to Meet Local Refinery Quotas

Nigeria’s oil regulatory body announced on Monday that it will prevent the export of oil cargoes from producers who do not fulfill their required quotas for supplying local refineries, including the Dangote Refinery, the largest in Africa.

Under the Petroleum Industry Act, Nigeria’s oil industry law mandates that oil producers, including international companies, allocate a specific amount of crude to domestic refineries before exporting. This is referred to as the domestic crude supply obligation.

However, oil producers have expressed concerns that they cannot meet this requirement, citing that refineries are not offering competitive prices. As a result, the Dangote Refinery has urged the regulator to enforce compliance with the law.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) issued a statement on Monday, in which its head, Gbenga Komolafe, reminded oil exploration and production companies of their responsibilities and the penalties for non-compliance.

According to the Commission, a meeting was held last week between producers and refiners. In this meeting, refiners accused producers of failing to meet their obligations, while producers argued that the offered prices were too low, leading them to seek alternative markets.

Komolafe emphasized that diverting crude oil meant for domestic refineries is illegal and warned that the Commission would now block export permits for such shipments.

For the first half of 2025, Nigerian refineries are expected to require 770,500 barrels per day, with the Dangote Refinery accounting for 550,000 barrels per day, as outlined in a schedule provided by the oil regulator.