A detailed view of an oil refinery in Africa, highlighting the industrial complex with pipelines and storage tanks.
Nigeria’s upstream oil regulator has announced that it will withhold export permits for oil cargoes from producers who do not meet their domestic crude supply obligations, which include supplying critical volumes to local refineries like the Dangote Refinery. Under the Petroleum Industry Act, oil companies operating in Nigeria must allocate a specific volume of crude for domestic refining before exporting any surplus. However, producers argue that the low prices offered by local refiners compel them to explore alternative markets, resulting in widespread noncompliance with the law. In response, Gbenga Komolafe, head of the Nigerian Upstream Petroleum Regulatory Commission, has reiterated the legal obligations and penalties, warning that any diversion of crude designated for domestic use will lead to denied export permits. This move comes after a recent meeting where refiners and producers clashed over responsibility for meeting the domestic supply quotas.
Source: Reuters