New NUPRC Regulation Requires Oil Producers to Sell Crude Oil to Local Refineries

The domestic refineries can make the payments for purchased crude in dollars, naira, or a combination of both.

SEATTLE (Oil Monster): The Nigerian federal government, by way of new regulations, imposed through the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), has made it mandatory for all oil producers to sell oil to local refineries. This is part of efforts by the country to reduce its dependence on imported refined oil products.

Under the new regulation, all oil producing companies in Nigeria are required to supply crude to domestic refineries. The producers will be permitted to export, only upon fulfilling domestic supply commitments. The NUPRC will play an important role, that of a middleman between local refineries and producers, thereby helping both the parties to reach a sales purchase agreement.

ALSO READ:

NNPCL Sets to Begin Importation of Crude Oil

Nigeria Blamed Theft and Sabotage for Slump in March Crude Oil Output

The NUPRC plans to implement the new initiative during the second half of the current year. The decision regarding the quantity of crude to be procured by each refinery is yet to be determined. The domestic refineries can make the payments for purchased crude in dollars, naira, or a combination of both.

The new regulation is expected to benefit Warri and Port-Harcourt refineries as well as smaller refineries such as Waltersmith, OPAC, and Niger Delta Petroleum Refinery. It will help in avoiding shortages and ensuring smooth operations.