…to facilitate local supply
The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) is moving to ensure stable supply of crude oil for domestic refining.
To this end, NUPRC has mandated oil producers to supply around 483,000 barrels of crude oil per day to local refineries for the first six months of 2024, in compliance with new regulations from the commission.
The Dangote Refinery and three government-owned refineries are expected to commence operations in 2024.
The Dangote Refinery will receive the largest share of crude, with a volume of 325,000 bpd of the 650,000-barrel-per-day reserved for the domestic market, as detailed in the recently published Domestic Crude Supply Obligation guidelines by the NUPRC.
Data from the NUPRC, according Nairametrics, indicates that six refineries, collectively boasting a refining capacity of 864,500 barrels per day (bpd), are anticipated to become operational starting in 2024.
As such, oil producers will need to provide slightly more than half of the crude requirements to meet local refining needs.
Refineries to enjoy crude oil allocations include the Warri and Port Harcourt refineries, anticipated to receive 75,000 and 54,000 barrels of crude oil daily.
Similarly, refineries including Waltersmith, OPAC, and Niger Delta Petroleum Refinery, among others, will receive 10,000 bpd and below, it is said.
The Petroleum Industry Act (PIA) enacted in 2021 introduced a provision mandating oil producers in Nigeria to allocate a portion of their crude to domestic refineries to prevent them from facing shortages.
However, as of now, this regulation has not been implemented.
Nigeria has been seeking to end the importation of petroleum products and keep prices relatively low after the removal of the fuel subsidy in June. The price of fuel spiked by over 200 per cent after the removal of the subsidy in June.
Mele Kyari, the CEO of the NNPCL, had said in a recent interview that local refining would only slightly reduce the price of fuel across the country after subsidy removal.
Kyari had said the reduction would fall within the range of N20 to N30 per litre, from the imported product.
Since 2021, Nigeria has taken on foreign contractors in the rehabilitation of its state-owned refineries and supported the private sector in building others.
The turnaround maintenance of the old Port Harcourt refinery has been completed and the facility is expected to begin refining 60,000 barrels of oil daily from January 2024.
