The federal government has set up a committee to resolve the issue of supply to local refineries, including Dangote refinery.
The Minister of State for Petroleum Resources, Heineken Lokpobiri, made this disclosure in a statement on Thursday.
Lokpobiri stated that the committee will investigate the disagreements among industry stakeholders and provide a report to him by Monday or Tuesday, determining the subsequent steps to be taken.
The Minister also appointed his permanent secretary as the head of the ad hoc committee, emphasizing that all stakeholders are responsible for enforcing the Petroleum Industry Act (PIA), particularly concerning domestic crude oil supply obligations.
“We remain committed to promoting local refining and creating an enabling environment for players in the sector, fostering a sustainable and thriving oil sector, ensuring compliance with the PIA and safeguarding the interests of all stakeholders.
“In respect of this, I convened a crucial meeting to address the recent misunderstandings surrounding the regulation on domestic crude supply, which has sparked concerns among industry stakeholders.
“It became evident that a collaborative approach was necessary to resolve the issues at hand, and to this end, a committee has been set up with the task of reviewing the concerns raised by all parties involved,” Lokpobiri said.
Backstory
Nairametrics previously reported that the management of Dangote Refinery has insisted that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is not upholding the Petroleum Industry Act (PIA) regarding the domestic supply of crude oil to local refineries.
In a statement by the spokesperson of the refinery, Anthony Chiejina,the oil company said NUPRC has only facilitated the sale of one cargo between itself and crude oil producers.
Accordingly, Chiejina said the regulatory body said it cannot implement its own Act because of the “sanctity of a contract,”.
“Aside from the term supply we bilaterally negotiated with NNPCL, so far NUPRC has only facilitated the purchase of one crude cargo from a domestic producer. The rest of the cargoes we have processed were purchased from international traders.
“All we are asking for is for refineries in Nigeria to buy crude directly from the companies that produce it in Nigeria rather than from international middlemen.
“Unfortunately, the NUPRC has effectively admitted in their statement, that they will be unable to enforce the domestic crude supply obligation as specified in the PIA citing “sanctity of contracts” as an excuse,” the statement said.
What you should know
The Dangote Refinery has been embroiled in an ongoing dispute with Nigerian oil sector authorities regarding the supply of crude oil.
Recently, the Federal Executive Council (FEC) approved a significant policy shift, allowing crude oil to be sold to the refinery in Naira instead of U.S. dollars.
In line with the Petroleum Industry Act (PIA), the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) requires oil producers in the country to supply a specified quantity of crude oil to local refineries under the Domestic Crude Supply Obligation (DCSO).
This directive ensures that local refineries, including the Dangote Refinery, have access to the crude oil needed for their operations.
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