Don’t pressure us to sell crude oil to local refineries, oil producers tell FG
Oil producers, under the aegis of the Independent Petroleum Producers Group (IPPG), have called on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) not to force them to sell crude oil to Dangote Refinery and other indigenous refiners. The group asked the Nigerian National Petroleum Company Limited (NNPCL) to re-direct its allocated crude oil volumes to […]
independent petroleum producers group (ippg)
Oil producers, under the aegis of the Independent Petroleum Producers Group (IPPG), have called on the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) not to force them to sell crude oil to Dangote Refinery and other indigenous refiners.
The group asked the Nigerian National Petroleum Company Limited (NNPCL) to re-direct its allocated crude oil volumes to the local refineries.
This was contained in a letter dated August 16, 2024, written by the Chairman of IPPG, Abdulrazak Isa to the Chief Executive of NUPRC, Mr. Gbenga Komolafe.
The letter came against the backdrop of recent happenings in the oil and gas sector over the lack of supply to the local refineries.
President Bola Tinubu had recently directed the NNPCL to sell crude to Dangote refineries in naira.
Following the directive, Minister of Finance and Coordinating Minister for the Economy, Wale Edun, on Monday revealed that the sale of crude to Dangote refinery would commence in October.
However, IPPG in the letter asked the NNPCL to utilise its allocated 445,000 barrels per day intervention crude oil volume to salvage the current situation as was done in the past.
Isa said some IPPG members already owned and were supplying crude oil to local refineries but insisted that the NNPCL was in a good position to mitigate the current oil supply shortfall faced by local refiners by leveraging its statutory crude allocation for meeting local domestic consumption.
“Historically, NNPCL has always had an intervention crude oil volume (445kbopd) to satisfy the nation’s domestic consumption. This volume has always been used, under various swap mechanisms, to import refined products for domestic consumption.
“Since there is now domestic refining capacity to meet consumption, this dedicated volume should be reserved for all domestic refineries under a price hedge mechanism that can be provided by a suitable financial institution such as Afrexim Bank,” he said.
He said while the group is not opposed to supporting the domestic refineries, the principle of willing buyer, willing seller must be respected without putting undue pressure on private businesses.