The Federal Government and crude oil producers in Nigeria have reached an agreement to ensure a sustainable supply of crude oil to local refineries under a market-determined pricing system.
This move aims to balance business optimisation for operators with adequate feedstock supply to their refineries weeks after Dangote Petroleum Refinery raised alarm over alleged sabotage.
The agreement was reached at a meeting convened by the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, where producers, under the Oil Producers Trade Section, OPTS, agreed to a framework that benefits both parties. The goal is to prevent local refineries from being strangled by uncompetitive pricing.
NUPRC Chief Executive, Gbenga Komolafe, emphasised the need for a rule of engagement to ensure pricing models do not hinder domestic refineries. He therefore directed producers and refiners to provide monthly cargo price quotes for effective monitoring and regulation.
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The regulator aims to drive the willing buyer-willing seller provision, prevent price strangulation, and attract investments to boost upstream development and domestic energy supply sustainability.
This agreement according to statement issued by the Commission’s Public Affairs Unit aligns with implementation of the Petroleum Industry Act (PIA) 2021 to ensure a level playing field for producers and refiners to operate effectively.
(Editor: Terverr Tyav)
