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Nigerian Oil Producers Reject Forced Crude Sales to Dangote Refinery, Others 

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Nigerian Oil Producers Reject Forced Crude Sales to Dangote Refinery, Others 

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By Emmanuel Kwada

The Independent Petroleum Producers Group (IPPG) has opposed the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) directive to sell crude oil to local refineries, including the Dangote Refinery. Instead, they advocate for a “willing buyer, willing seller” basis, allowing producers to negotiate sales agreements with refiners.

In a letter to NUPRC’s CEO, Gbenga Komolafe, IPPG Chairman Abdulrazak Isa expressed concerns about the commission’s production forecast for the second half of 2024, which mandates selling crude to local refineries.

IPPG Chairman Abdulrazak Isa expressed concerns about the commission’s production

Isa suggested that the NNPC utilize its allocated 445,000 barrels per day intervention crude oil volume to meet domestic demand, with excess production treated as export volumes.

IPPG objects to the approach taken by the Dangote Refinery, citing conflicts with the willing-buyer, willing-seller framework established by the Petroleum Industry Act 2021. They emphasize the need for mutually beneficial solutions that respect commercial agreements, economic interests, and business models in the oil and gas sector.

The producers argue that long-term crude oil Sales and Purchase Agreements should be negotiated between refiners and producers, following industry best practices.

They support enhancing domestic refining capacity but reject undue pressure on private sector businesses to subsidize others within the oil and gas value chain.

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