NUPRC Restricts Crude Exports by Producers Bypassing Nigerian Refineries

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced a decisive measure to stop crude oil producers from exporting crude without first offering it to local refineries, in a move designed to strengthen Nigeria’s domestic refining capacity and ensure energy self-sufficiency.

This policy marks a significant shift in Nigeria’s upstream oil management and aligns with the federal government’s broader push to prioritize in-country value addition and reduce dependence on imported refined petroleum products. The NUPRC’s directive is expected to compel international oil companies (IOCs) and indigenous producers to comply strictly with the provisions of the Petroleum Industry Act (PIA) regarding the domestic crude oil supply obligations (DCSO).

Speaking on the development, the Chief Executive Officer of the NUPRC, Gbenga Komolafe, explained that the new enforcement regime would ensure that no operator exports crude oil without first fulfilling their domestic supply commitments. He stressed that the commission’s monitoring framework would track every barrel of crude produced, sold, or exported from Nigerian fields to guarantee compliance with national energy priorities.

Komolafe said, “We have observed instances where producers bypass domestic refiners in pursuit of more lucrative export deals. This undermines the objectives of the Petroleum Industry Act, which seeks to promote local refining and guarantee energy security. Going forward, the NUPRC will not approve export permits for any producer who fails to meet their domestic crude supply obligations.”

The move comes amid Nigeria’s efforts to revive and expand its refining sector, particularly following the commencement of operations at the Dangote Refinery and the ongoing rehabilitation of the Port Harcourt, Warri, and Kaduna refineries. These facilities are expected to collectively process more than 700,000 barrels per day once fully operational, significantly reducing Nigeria’s reliance on imported petroleum products.

Energy analysts have hailed the NUPRC’s decision as a step in the right direction. They argue that the enforcement of domestic crude obligations will ensure a steady supply of feedstock to local refiners, helping them operate at optimal capacity and stabilize fuel supply in the country.

Dr. Bala Zaka, an energy economist, said that prioritizing domestic refining would create jobs, boost government revenue, and conserve foreign exchange. “This policy is crucial to achieving Nigeria’s self-sufficiency in fuel production. When local refineries get adequate crude supply, they will function efficiently, and the nation will no longer waste billions of dollars importing refined products,” he said.

He further noted that the NUPRC must enforce transparency and fairness in the allocation of crude to avoid favoritism or market distortions. According to him, ensuring a level playing field for both government-owned and private refiners is key to sustaining the gains of the new policy.

The NUPRC’s decision is also expected to have far-reaching implications for oil producers operating in Nigeria. Some industry players have expressed concerns that the directive could disrupt existing export contracts and affect revenue flows in the short term. However, Komolafe emphasized that the Commission was ready to work closely with producers to ensure a smooth transition and compliance with regulatory requirements.

He stated, “We understand the commercial implications for operators, but the long-term benefits for Nigeria’s energy independence far outweigh short-term inconveniences. We will engage all stakeholders to facilitate an orderly process that benefits the industry and the economy.”

The Commission’s enforcement strategy will involve strict monitoring of production data through the national upstream production tracking system. Every crude lifting will be verified and reconciled with refinery supply commitments before export permits are granted. This data-driven approach aims to eliminate leakages, improve accountability, and ensure that Nigeria maximizes the value of its hydrocarbon resources.

Industry observers say that with the Dangote Refinery already seeking more feedstock to meet its processing target of 650,000 barrels per day, the NUPRC’s move could help the plant operate at full capacity sooner. The refinery, which recently began refining diesel and aviation fuel, is seen as a cornerstone of Nigeria’s energy transformation agenda.

Similarly, modular refineries across the Niger Delta are expected to benefit from the increased domestic crude allocation. These smaller plants, which produce diesel, kerosene, and other light petroleum products, have long complained about the difficulty in securing crude supply due to producers’ preference for export markets.

The directive is also consistent with President Bola Tinubu’s administration’s commitment to achieving energy security, curbing fuel importation, and stabilizing the downstream market. The government has maintained that boosting domestic refining will reduce exposure to global oil price volatility and strengthen the naira through foreign exchange savings.

According to a recent report by the Nigerian National Petroleum Company Limited (NNPC), the country spends over $10 billion annually importing refined petroleum products. This figure is expected to drop significantly once local refineries reach full operational capacity.

However, experts have warned that the NUPRC must ensure that local refiners have the technical capacity and financial strength to pay for and process the crude allocated to them. Without proper oversight, they say, the system could create a new layer of inefficiency or rent-seeking.

Energy consultant Ayodele Oni cautioned, “While the policy is laudable, there must be clear criteria for determining the refiners eligible to receive crude. The Commission should also ensure that producers are not unduly penalized when refiners fail to lift the allocated volumes on time.”

Meanwhile, oil producers are expected to meet with NUPRC officials in the coming weeks to discuss the implementation details and resolve potential operational challenges. Industry sources indicate that discussions will focus on pricing mechanisms, crude quality specifications, and delivery logistics to ensure seamless execution.

If effectively implemented, the new export restriction could mark a turning point for Nigeria’s petroleum sector. It has the potential to strengthen domestic refining, improve product availability, and foster industrial growth across value chains such as petrochemicals and manufacturing.

In conclusion, the NUPRC’s firm stance against producers bypassing domestic refiners demonstrates the government’s renewed commitment to building a resilient, self-sustaining energy industry. With consistent enforcement, transparency, and collaboration among stakeholders, Nigeria could finally unlock the full value of its crude oil resources and achieve long-sought energy independence.