The Independent Petroleum Producers Group (IPPG) has expressed strong opposition to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC)’s directive to supply crude oil to Dangote Petroleum Refinery and other local refineries. In a letter addressed to NUPRC’s Chief Executive, Gbenga Komolafe, IPPG Chairman Abdulrazak Isa advocated for a “willing buyer, willing seller” framework, citing concerns on commercial agreements and economic interests.
The IPPG proposed that the Nigerian National Petroleum Corporation (NNPC) should use its allocated intervention crude oil volume of 445,000 barrels per day for home consumption, with additional production regarded as exports. This approach has been viewed as equitable, benefiting all parties concerned while complying with the Petroleum Industry Act 2021.
The IPPG also stressed that improving Nigeria’s petroleum value chain must be done through legal and contractual means.
They dispute the request for quotations for monthly supplies of crude oil to licensed refiners, as they feel the Dangote Refinery is not complying with the Petroleum Industry Act 2021’s willing-buyer, willing-seller premise.
However, even though the IPPG acknowledged the contributions made by Nigerian entrepreneurs to upgrading local refinery ability, it specified that no private firm should be compelled into arrangements that could subsidize another within the oil and gas value chain.
“Refiners should negotiate and execute long-term crude oil Sales and Purchase Agreements with producers and their marketing agents, following industry best practices in line with the willing buyer, willing seller framework,” said one of them.
The adoption of this strategy allows all interested parties to achieve a win-win outcome without compromising commercial agreements, economic interests, and business models in the oil and gas sector
