FG enforces ban on crude oil exports for domestic refineries

The Federal Government has imposed a ban on the export of crude oil designated for domestic refineries, aiming to strengthen local refining capabilities, reduce petroleum imports, and ease foreign exchange pressures.

Previously, about 500,000 barrels of crude per day intended for domestic refineries were diverted to international markets by traders and producers seeking quicker foreign exchange earnings.

In response, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has warned that export permits for crude meant for local refineries will no longer be issued. Any changes to cargoes designated for domestic refining must now be approved by the NUPRC’s chief executive.

The commission’s action follows a meeting attended by over 50 industry stakeholders, including refiners and producers, who exchanged blame over inconsistencies in the Domestic Crude Supply Obligation (DCSO) policy. While refiners accused producers of underdelivering and selling crude abroad, producers blamed refiners for not meeting commercial and operational terms.

The NUPRC reiterated the need for all parties to comply with the DCSO policy and advised both refiners and producers to adhere to established best practices.

Section 109 of the Petroleum Industry Act (PIA) 2021, which mandates a stable crude supply for local refineries, will be strictly enforced. This move aims to support the Naira-for-Crude program, ensuring that domestic refineries receive crude oil and sell refined products in local currency.

In the first half of 2025, Nigerian refineries, including the Dangote Petroleum Refinery, Port Harcourt, Warri, and Kaduna refineries, will require a daily supply of 770,500 barrels of crude oil.

The NUPRC remains committed to improving domestic refining and ensuring energy security, with a forecasted increase in crude production to meet both local and export demands.

The latest steps align with Nigeria’s broader goal to reduce dependence on imported petroleum products, thus boosting local refining capacity and economic stability.