July 11, (THEWILL) – The Federal Government has reached an agreement with oil producers for the sale of crude oil to local refiners at market prices through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The agreement was reached at a meeting convened by the 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.
This is coming after Dangote Refinery accused International Oil Companies (IOCs) in Nigeria of a deliberate effort to frustrate the company to buy local crude while pushing it to import crude from countries like the United States at a higher cost.
Speaking through its Vice President, Oil and Gas, Devakumar Edwin, the company had said the IOCs sometimes made the refinery pay $6 over and above the market price. This situation, he said, has forced the refinery to reduce its output.
NUPRC Chief Executive, Gbenga Komolafe, in a statement on Thursday, 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.
The agreement, according to a statement issued by the Commission’s Public Affairs Unit, aligns with the implementation of the Petroleum Industry Act (PIA) 2021 to ensure a level playing field for producers and refiners to operate effectively.
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.
