The Independent Petroleum Producers Group (IPPG) has rejected a mandate to sell crude oil to local refineries, including the Dangote Petroleum Refinery. The IPPG, which produces 30% of Nigeria’s crude oil, argued that the move would undermine the willing-buyer, willing-seller framework prescribed by the Petroleum Industry Act 2021.
The group’s chairman, Abdulrazak Isa, stated that IPPG members already supply crude oil to local refineries and that the Nigerian National Petroleum Company Limited (NNPC) should utilize its allocated crude oil volumes to mitigate the current crude supply shortage.
Isa emphasized that any national production above the allocated volume should be treated as export volumes, adhering to the international market framework. He expressed concerns about the potential implications of the allocation methodology on the economy, particularly foreign exchange earnings.
The IPPG also called for transparency in the allocation criteria and methodology, seeking an opportunity to make input into the production forecast. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) did not respond to enquiries on the matter.
Meanwhile, modular refinery owners have warned the Federal Government against ignoring them while selling crude oil to the Dangote refinery. The Crude Oil Refiners Association of Nigeria (CORAN) commended the government’s decision to sell crude to Dangote in naira but expressed concerns about the emergence of a monopoly.
Key points:
- IPPG rejects mandate to sell crude oil to local refineries, including Dangote Petroleum Refinery
- IPPG argues that the move would undermine the willing-buyer, willing-seller framework
- NNPC should utilize its allocated crude oil volumes to mitigate the current crude supply shortage
- IPPG seeks transparency in allocation criteria and methodology
- Modular refinery owners warn against ignoring them while selling crude oil to Dangote refinery.
