Regulator Gives Fresh Order as Dangote Refinery is Set to Resume Sale of Fuel
- Nigerian Upstream Petroleum Regulatory Commission have complained about a shortage of feedstock
- NUPRC Chief Executive wants the commission to create a model for the smooth execution
- He said this would help address the matters of the regulation and enforcement of the crude supply
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
The Dangote refinery and other regional crude oil refining facilities in Nigeria, according to the Nigerian Upstream Petroleum Regulatory Commission, have been complaining about a shortage of feedstock.
Source: UGC
As a result, the NUPRC Chief Executive, Gbenga Komolafe, has instructed the commission's enforcement committee to create a model for smoothly executing the Domestic Crude Oil Supply Obligation.
Komolafe issued the order during a meeting to review the DCSO as stated in Section 109(2) of the Petroleum Industry Act 2021.
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According to a statement released on Wednesday, this aims to address matters about the regulation and enforcement of the crude supply.
The statement read:
“Komolafe stressed the importance of prioritising feedstock supply to local refineries and addressing complaints from oil producers and Dangote Refinery within the stipulated period.”
Significant issues in the sector
The NUPRC boss underlined the government's commitment to making Nigeria a net exporter of refined petroleum products.
He also outlined challenges like the neglect of legal provisions in contractual agreements, reluctance of some companies to allocate production to domestic refineries, changes in vessel nomination, delays in vessel arrival, and frequent changes in laycans for crude oil allocated to domestic refineries.
As the nation moves away from the fuel subsidy system, Komolafe reiterated the necessity to build a robust domestic refining capacity while urging producers to meet their domestic crude oil supply obligations to domestic refineries.
The budgetary objective of 1.78 million barrels per day for oil output in 2024 was not met during the conference, which raised concerns about the feedstock supply for local refineries—especially since several are set to come online.
Dangote Refinery finally moves to sell products
Legit.ng reported that there are indications that by next week, the Dangote refinery may start selling petroleum products, particularly diesel, to regional distributors.
This development is on the back of a report that the Nigerian National Petroleum Company Limited (NNPCL) has recently resumed selling Premium Motor Spirit (PMS) directly to the Independent Petroleum Marketers Association of Nigeria (IPMAN).
The Guardian reported that even though IPMAN currently purchases petrol from NNPCL at the ex-depot price of roughly N600 per litre, the marketers stated that a deal had been made to lift approximately 20 million litres of diesel from the refinery each week.
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Source: Legit.ng
