Emmanuel Ochayi
The Nigerian Upstream Petroleum Regulatory Council (NUPRC) has mandated oil producers to allocate not less than 483,000 barrels per day (bpd) of crude oil to domestic refineries for the initial half of 2024.
READ ALSO: Dangote Refinery Moves Closer To Begin Full Operations As It Receives Third Crude Shipments Of 1 Million Barrels
This directive aligns with Nigeria’s strategy to fortify its local refining capabilities and reduce dependence on imported petroleum products.
“This initiative signifies a pivotal step in ensuring a stable and self-reliant refining ecosystem within Nigeria,” stated a representative from the NUPRC.
Under the newly published Domestic Crude Supply Obligation guidelines, the 650,000-bpd Dangote refinery is poised to receive the lion’s share, amounting to 325,000 bpd.
Concurrently, government-run refineries, including Warri and Port-Harcourt facilities, are slated to benefit from this allocation, with 75,000 and 54,000 barrels of crude oil daily, respectively.
“In a bid to bolster domestic refining, Nigeria is gearing up for the operationalization of six refineries with a combined capacity of 864,500 bpd, marking a significant leap towards self-sufficiency,” emphasized industry experts.
Despite the Petroleum Industry Act (PIA) introduced in 2021 to facilitate domestic refining obligations, its enforcement has faced delays. The nation aims to curtail petroleum product imports and stabilize prices following the removal of fuel subsidies earlier in the year, which led to a notable spike in fuel prices.
Commenting on the potential impact, the CEO of the NNPCL remarked in a previous interview that local refining might marginally reduce fuel prices by an estimated range of N20 to N30 per liter compared to imported fuel, highlighting the complexities involved in price stabilization.
Nigeria’s strides in refinery rehabilitation and private-sector-supported refinery construction, such as the Dangote refinery, have been ongoing since 2021. While the Dangote refinery has received crude, its refining operations are yet to commence.
Simultaneously, the refurbishment of the aged Port-Harcourt refinery is set to kick off operations, refining 60,000 barrels of oil per day from January 2024, marking a milestone in Nigeria’s refinery revival efforts.
