NewStats: 3,263,446 , 8,180,164 topics. Date: Thursday, 05 June 2025 at 11:30 PM 5h6c1b

Oil producers in Nigeria, under the Independent Petroleum Producers Group (IPPG), have expressed opposition to being compelled to sell crude oil to the Dangote Refinery and other local refineries.

The group warned against any move to mandate such sales, calling instead for the Nigerian National Petroleum Company Limited (NNPC) to redirect its allocated crude volumes to local refiners in order to address the ongoing crude supply shortages affecting local product availability across Nigeria.

In a letter dated August 16, 2024, addressed to the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, IPPG Chairman Abdulrazak Isa urged the NNPC to utilize its allocated 445,000 barrels per day intervention volume to mitigate the shortfall, a strategy it has employed in the past. Isa noted that while some IPPG already supply local refineries, the NNPC is best positioned to meet domestic supply needs through its statutory crude allocation.

Historically, the NNPC has used this allocation to satisfy domestic consumption by importing refined products through various swap mechanisms. With the increase in domestic refining capacity, Isa suggested the NNPC should reserve this volume for local refineries under a price hedge mechanism that could be facilitated by financial institutions like Afrexim Bank.

However, the IPPG insists that any national crude production above the allocated volume should remain for export, adhering to a “willing buyer, willing seller” framework, in line with international market practices. This, Isa argued, would allow refiners to export excess products, boosting Nigeria’s foreign exchange earnings.

“While we fully and commend the efforts of Nigerian entrepreneurs to enhance domestic refining capacity, it is important that no private sector business is unduly pressured into arrangements that may effectively subsidise another within the oil and gas value chain under any guise whatsoever.

“Under this willing-buyer, willing-seller framework, it is essential for refiners to negotiate and execute long-term crude oil Sales and Purchase Agreements with producers and their marketing agents. These agreements should follow industry best practices, with typical tenures ranging from one to five years,’’ the IPPG chairman said.

The group raised concerns about recent developments, including the domestic crude refining requirements and crude production forecast for the second half of 2024 announced by NUPRC. They also criticized the request for monthly crude supply quotations from producers for local refineries, labeling it as a departure from the Petroleum Industry Act’s market-oriented principles.

Isa called for transparency in how crude oil allocations are determined and sought input from IPPG into production forecasts, ensuring they reflect actual operational realities. The group stressed the importance of respecting existing commercial agreements and business models in Nigeria’s oil and gas sector.

While the IPPG expressed for enhancing domestic refining capacity, it firmly opposed any undue pressure on private sector businesses to subsidize other segments of the value chain. The group reiterated the need for long-term crude oil sales agreements, negotiated on fair , between producers and refiners, to ensure a stable and transparent supply of crude oil within the domestic market.

This comes amidst ongoing tensions between local refineries and international oil companies (IOCs), with Dangote Group accusing IOCs of prioritizing foreign markets and frustrating crude supply to its 650,000-barrel capacity refinery.

Meanwhile, President Bola Tinubu recently directed the NNPC to begin selling crude to local refineries in naira, a move expected to commence in October.

https://guardian.ng/energy/oil-producers-reject-mandate-to-supply-local-refineries-crude/

this country has gone to the dogs

Sensible
They are businesses too
Dangote is exporting cement and fertiliser without censure

Everything about the government of Gbola Tilumbu is backwardness and calamitous.

Omo😂😂😂😂

E done tay small Dangote complain recently.

COMRADES are speechless

When will the tenure of this slowpoke popularly known as Tinubu comes to an end?

This nonsense is getting out of hand

What are the names of the oil producers?

Jagaban the master strategist my asshole

Nobody gives a fukc about the drug man directives.

Thank God say na them them dey full themselves and their APC nairaland e-diot rodents

NNPC is a disgrace to this nation.I don't what can be done to turn the fortunes of this fantastically corrupt organization around.

Leave now if you have the means. Don't say you were not warned. Redeem the time! The days are getting more and more evil.

If you can read and understand...... they are right
They should close shop because someone else is opening theirs
I thought they said Nigeria should be a free trade zone.... why mandating a part to sell to another. ...
They were supposed to float the Naira after refineries where up

N

Federal government please revoked all oill producers linces any one who refuse to sale to local refinery.

Is this a joke? Some people have swear that Nigeria can never work.

Lol. Nnpc should allocate the oil found in the north to dangote refinary as simple as that

dre11:




https://guardian.ng/energy/oil-producers-reject-mandate-to-supply-local-refineries-crude/

Nnpcl has an arm that is drilling or producing that group can supply Dangote and other local refineries. This is not rocket science

God!! Reading this is very scary considering the future of this Nataion.

At times, I get confused while reading news that concerns this country called Nigeria. Everything in this country appears to be a rocket science.

mastermaestro:
Leave now if you have the means. Don't say you were not warned. Redeem the time! The days are getting more and more evil.

leave to where?

Every day, another problem.

I thought it was the NNPC's own allocation that was to be channelled to local refineries

How can the federal government dictate to independent producers who to sell to.

With this latest palaver, doe thar mean the October start date for selling to Dangote refinery may not materialise?

Chai...Naijeeerriaaa

Local man is tired

Exporting excess crude or exporting excess refined petroleum product which is more valuable? Some of this people think with thier ass. This could even address the case of stolen crude as especially modular refineries can get product from source

Crucifixion of Patriotism on the Altar of Mammon.

Our political class have crippled this country: who are the private sector operators?

I am yet to understand how we have so much crude and yet our local refineries still struggle to get crude oil to refine for our energy security

Those politicians are so reckless that they have already sold out crude yet to be drilled.

This country and its assets needs to be reclaimed from criminals

Banza kowai

mastermaestro:
Leave now if you have the means. Don't say you were not warned. Redeem the time! The days are getting more and more evil.

Abeg, wetin wan happen?

Gajagojo:
Sensible
They are businesses too
Dangote is exporting cement and fertiliser without censure

This is just sensational journalism and intellectually bereft haters would take this past hook,line and sinker ...it's basically the same thing the reversion of crude sales in naira policy of the govt is saying.....there is an allocation of 459k barrels for local consumption and this is what has been gazetted into the policy framework.....the NNPCL or FG have no business with what that group is doing,if they like let them sell in Afghanistan currency.....

Enemies of Nigeria the snakes have started to elongate their necks.

dre11:




https://guardian.ng/energy/oil-producers-reject-mandate-to-supply-local-refineries-crude/

Anybody wey understand this Nigeria fuel and subsidy issues,no dey normal again ...

Is it possible in any sane society for any producer to say I refuse to sell to the local market.

DeLaRue:
Every day, another problem.

I thought it was the NNPC's own allocation that was to be channelled to local refineries

How can the federal government dictate to independent producers who to sell to.

With this latest palaver, doe thar mean the October start date for selling to Dangote refinery may not materialise?

Chai...Naijeeerriaaa