Home Oil and Gas PIA: NUPRC assures proper implementation, domestic crude supply as Dangote, others search for crude

PIA: NUPRC assures proper implementation, domestic crude supply as Dangote, others search for crude

by Business News Report

Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it is committed to effective implementation of the Petroleum Industry Act (PIA 2021) for the sector to contribute more to national economy. The commission says it will ensure that relevant sections of the PIA that affect its operations are duly implemented, including the Domestic Crude Oil Supply to licensed refineries in Nigeria. This is coming on the heels of reports that apart from Dangote Refinery, five other modular refineries are affected by the unavailability of crude oil for their production. In September, it was reported that the-650,000-barrels-per-day Dangote Refinery would receive its first cargo of crude and begin operation in October. The refinery is expected to start producing up to 370,000 barrels per day of diesel and jet fuel but the October production target failed to happen. It is reported that Dangote refinery is yet to receive the required volumes of crude oil needed to begin its production of refined products from the Nigerian National Petroleum Company. Five other modular refineries in the country are also affected by the unavailability of crude oil for their production.

Officials from the Dangote Refinery visited the NUPRC recently to complain about the lack of crude oil required by the plant and why it would be odd for the company to be importing crude when Nigeria produces the commodity.” This is the second time Dangote Refinery would miss its production target in 2023. During the inauguration of the facility in May 2023, the President of Dangote Group, Aliko Dangote, assured that the refinery would begin operations by the end of July. “Your excellencies, distinguished guests, our first product will be in the market before the end of July or beginning of August this year,” Dangote had said.

However Mr Gbenga Komolafe, Commission Chief Executive (CCE), NUPRC stated during a meeting with Exploration and Production Companies on Domestic Crude Supply Obligation (DCSO) at the NUPRC headquarters in Abuja that it will ensure proper implementation of PIA. The meeting was conveyed to chat a way forward for alignment, on the implementation of domestic crude oil supply obligation, operator’s compliance status and operator’s response. As more private refineries indicate readiness to start production soon in Nigeria, the NUPRC is taking necessary steps within the prescriptions of the PIA 2021 to ensure adequate and consistent supply of feedstock to operators.

In line with its mandate of ensuring crude oil supply to licensed refineries in Nigeria as enshrined in Section 109 (4) of the PIA, the commission said it recently cautioned that there would be consequences and sanctions for sabotaging the process. He said effective implementation of the PIA would create an enabling environment for players in the industry to thrive and ensure the petroleum industry generated more income for the government.

“As the pioneer regulator of the upstream sector, we want effective implementation of the relevant sections of the PIA, and we cannot shy away from it. We are committed to the effective implementation of the PIA in the interest of our industry and our dear nation. As I said, as a regulatory body, we will regulate in line with the provisions of the Act and whatever decision we take will be in line with the law to ensure growth and development,” he said. Komolafe, however, urged industry operators to uphold best practices and comply with provisions of the law as the federal government, through its relevant bodies was carrying out reforms.

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