Nigeria's Upstream Petroleum Regulatory Commission (NUPRC) warned oil companies that they risk losing export licenses if they fail to supply sufficient crude oil to domestic refineries, according to a statement issued to local media.
"The diversion of crude cargo designated for domestic refineries is a contravention of the law, and the commission will henceforth disallow export permits for designated crude cargos for domestic refining," the NUPRC's head, Gbenga Komolafe, was quoted as saying by local media.
The warning follows disputes between oil refiners and producers over the inconsistent implementation of the Domestic Crude Supply Obligation (DCSO) policy, which defines the obligations of oil producers to supply a certain volume of crude oil to local refineries as mandated by the Petroleum Industry Act, Komolafe reportedly said in the statement.
"At a meeting last weekend, attended by more than 50 critical industry players, both the refiners and producers blamed each other for the inconsistencies in the implementation of the DCSO policy. They, however, agreed that the regulator has put in place appropriate measures for effective implementation," it read.
While the refiners claimed that producers were not meeting supply terms and preferred to sell their crude oil outside, forcing them to look elsewhere for feedstock, the producers countered that refiners hardly met commercial and operational terms, forcing them to explore other markets elsewhere to avoid unnecessary operational bottlenecks, NUPRC's head also noted.