After decades of extensive petroleum imports, the Nigerian National Petroleum Company Limited (NNPC) announced yesterday that it has permanently ceased this longstanding practice. This shift, expected to save Nigeria around $10 billion annually, results from the NNPC’s decision to source products from the 650,000 barrels-per-day Dangote Petroleum Refinery in Lagos.
Speaking at the ongoing 42nd annual conference of the Nigerian Association of Petroleum Explorationists (NAPE) in Lagos, NNPC’s Group CEO, Mr. Mele Kyari, made the announcement.
Adding to the optimism, the Independent Petroleum Marketers Association of Nigeria (IPMAN) disclosed a new arrangement to procure products directly from the $20 billion Dangote facility, moving away from the previous system of sourcing exclusively through the NNPC, which had faced opposition from independent marketers.
Kyari emphasised that under the Petroleum Industry Act (PIA) 2021, the Domestic Crude Oil Obligation (DCOO) mandates all oil producers to supply crude to the nation’s refineries, including the four NNPC facilities once they become operational. Addressing accusations of NNPC refusing to sell to local refineries, Kyari clarified:
“Oil is found in very many unexpected locations across the world, and people have choices. We saw an opportunity to now supply to not just Dangote, but every refinery that operates in the country. So, it’s a well-informed business decision. Therefore, from day one, we knew that it was to our benefit to supply crude oil to domestic refineries.”
He further dismissed the notion that NNPC needs external persuasion to serve domestic refineries:
“We don’t need to be persuaded. We don’t need anyone to talk to us. There is no need for any pressure from the streets for us to do this. We are already doing this.”
Kyari also addressed the premium nature of Nigerian crude, which attracts high global market prices. He pointed out that many refiners blend Nigerian crude with heavier, less expensive crude due to its high value.
In support of local processing, Kyari highlighted that NNPC has stopped importing refined products, opting instead to source fully from domestic refineries:
“I believe strongly that we must process all the crude we produce in the country up to the optimum. And we will do everything possible to make sure that we domesticate this. And today, NNPC does not import any product. We are taking wholly from the domestic refinery.”
Discussing crude sales to local refineries in naira, Kyari refuted claims of sabotage, saying:
“If you sell crude to domestic refinery in naira and buy product in naira from a domestic refinery, it’s a net-zero game. You lose nothing. Otherwise, whatever you do, you still have to source for FX because you have to import.”
He reminded all oil producers that they must comply with the DCOO, stressing that the obligation applies industry-wide:
“When NNPC refineries start working, we will come to you and tell you that you must contribute to supply to these refineries. It’s in the law. It doesn’t have to come from NNPC.”
On the domestic gas market, Kyari criticised the lack of industry-wide support for gas delivery infrastructure, noting that only NNPC has shouldered this responsibility. Nonetheless, he affirmed NNPC’s commitment to building a reliable supply framework and promoting Compressed Natural Gas (CNG) usage. By early 2025, at least 12 mother CNG stations will be operational.
NNPC is also constructing a mini LNG plant to facilitate gas supply for mid-sized power plants and gas-based industries, he stated.
Meanwhile, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) CEO, Mr. Gbenga Komolafe, reported that oil production has risen to 1.8 million barrels per day and is projected to hit 2 million by December. Komolafe also addressed misconceptions regarding international oil companies’ departure, explaining that they are rationalising portfolios due to the evolving energy market.
At the NAPE conference, NCDMB Executive Secretary, Mr. Felix Ogbe, shared that local content retention has reached 54% toward the 70% target by 2027, supported by Presidential Executive Orders on oil and gas and a reduced approval cycle of 60 days.
In Abuja, IPMAN National President Abubakar Shettima highlighted recent agreements with Dangote Refinery, enabling IPMAN members to directly lift products for distribution nationwide, stabilising supply at affordable rates. Shettima urged full support for Dangote Refinery, citing the positive impact on job creation and foreign exchange:
“IPMAN members nationwide should rely on the Dangote Refinery and Nigerian refineries for their white products, as this will translate into more job opportunities and aligns with President Bola Tinubu’s renewed hope agenda.”
On CNG, Shettima encouraged IPMAN members to support the government’s CNG rollout, noting:
“There is no doubt that CNG has the potential to rejuvenate our economy for a better life for Nigerians, and IPMAN is ready to give her all to support the CNG initiative.”
He emphasised the need for a partnership between IPMAN and the Presidential Compressed Natural Gas Initiative (PCNGI) to ensure accessible CNG stations across Nigeria.
