NUPRC Reports Significant Improvement in Domestic Crude Oil Allocation to Local Refineries

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has reported that Dangote Refinery received 98% of the crude oil offered to local refineries in Q2. This development is significant for the country's downstream sector, which has been plagued by fuel scarcity and inefficiencies.

The report highlights a marked improvement in the implementation of the Domestic Crude Quota Policy, which aims to ensure that domestic refineries receive a fair share of crude oil allocation. The policy was introduced to address the perennial fuel scarcity experienced in Nigeria, particularly during peak periods. The NUPRC's report suggests that Dangote Refinery has been the primary beneficiary of this policy, receiving a significant proportion of the allocated crude oil.

The Domestic Crude Quota Policy is governed by the Petroleum Industry Act (PIA) 2021, which established the NUPRC as the regulatory body for the upstream petroleum sector. The PIA also introduced the concept of domestic crude quota, which requires that a certain percentage of crude oil allocation be reserved for local refineries. The policy has been implemented in collaboration with the Nigerian National Petroleum Corporation (NNPC) and other stakeholders.

The NUPRC's report is likely to have significant implications for the downstream sector, particularly for companies such as Dangote Refinery that rely heavily on crude oil imports. Practitioners should monitor developments related to the Domestic Crude Quota Policy and its implementation, as it may impact their clients' business operations and investments in the sector.