Just In : FG orders refiners, oil producers to publish monthly crude oil supply quotes
In a bid to ensure sufficient supply of crude oil to local refineries, the Federal Government had ordered oil producers and refiners in the country to provide monthly price quotes on crude oil supply.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, in a statement yesterday it has agreed with oil producers to work towards sustainable supply of crude oil to local refineries under a market-determined pricing system.
The Commission explained that “the aim is to ensure that while the operators do business optimally, the refineries are not starved of feedstock”.
NUPRC noted that the producers under the umbrella of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI), agreed to concede to a framework that would be mutually beneficial with the aim of ensuring that local refineries are not strangulated due to off-the-curve prices.
The Commission Chief Executive, Engr. Gbenga Komolafe who spoke at the meeting in Abuja expressed the need for a rule of engagement to ensure that the pricing model from the oil producers does not hinder the domestic refineries.
He directed producers and refiners to provide the NUPRC with cargo price quotes on crude supply and delivery for effective monitoring and regulation of transactions among parties.
“We need to have the price quotes monthly,” he directed.
The CCE pointed out a convergence between the Domestic Crude Oil Supply Obligation (DCOSO) and the nation’s energy security, indicating that his team is re-engineering its regulatory processes to address the challenges.
“We allow all our processes to be transparent. While the Federal Government targets the implementation of the regulation, all parties must submit to the rules of engagement as a guide for operation,” he said.
He stressed that the NUPRC said s committed to driving the willing buyer/willing seller provision.
“We have to discuss pricing, especially as parties have committed to respecting their domestic crude oil obligation. As the regulator, we don’t want the upstream sector to be operated sub-optimally through cost under-recovery. So, the regulator is very alive to that. In crude pricing we will never allow price strangulation to disincentive our domestic refining capacity optimisation. The regulator does not support cost under-recovery in the upstream sector, and we will continue to work to ensure that crude supply profiteering as a negative factor that can strangulate our domestic refining capacity optimisation is disallowed.”
