FG Cracks Down on Oil Producers, Demands Transparency

FG Demands Monthly Oil Price Quotes from Producers

Oil producers are required by FG to submit monthly price bids for the supply of crude oil...

FG Orders Oil Producers to Submit Monthly Price Bids for Crude Oil Supply to Ensure Steady Refinery Operations, NUPRC Announces Market-Driven Pricing Mechanism

The federal government required refiners and oil producers to submit monthly price bids for crude oil delivery in order to ensure a steady supply of crude oil for domestic refineries.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) declared yesterday that it has struck an agreement with oil producers to use a market-driven pricing mechanism to ensure a steady supply of crude oil to nearby refineries.

The goal, as the commission explained, is to achieve a balance between the best possible commercial operations for operators and a consistent supply of feedstock for refineries.

The Lagos Chamber of Commerce and Industry (LCCI) oil producers trade section (OPTS) on behalf of the producers reached an amicable agreement on a framework that would keep local refineries from being crippled by exorbitant prices.

The commission's chief executive, Gbenga Komolafe, underlined the necessity of a precise engagement structure to guarantee that the oil producers' pricing model does not negatively impact the functioning of domestic refineries.

He directed producers and refiners to provide the NUPRC with monthly cargo price quotes for the supply and delivery of crude oil, guaranteeing efficient oversight and control over parties' dealings.

“Monthly price quotes are essential,” he emphasized.

The head of the commission emphasized the indispensible connection between national energy security and the domestic crude oil supply obligation (DCOSO), and he disclosed that his team is reorganizing regulatory procedures to address current roadblocks.

“We ensure that our processes are transparent and accountable, he said.

All parties involved in the regulation's implementation must abide by the rules as they are set forth, as they will form the basis for their activities. This includes the federal government.

He underlined that the willing buyer/willing seller principle is something that the NUPRC is committed to preserving.

Talks about pricing are important because of the pledge to meet domestic crude oil obligations.

Our aim as regulators is to ensure the upstream industry operates at optimal levels by guaranteeing adequate cost recovery, thereby preventing suboptimal performance.

We are keeping an eye on this problem.

We will not put up with price manipulation in the crude oil market that prevents us from making the best use of our home refining capabilities.

The regulator will keep pushing to stop profiteering in the crude oil supply, which can impede the best possible local refining capacity, and will not tolerate cost under-recovery in the upstream sector.