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NUPRC to penalise companies that fail to supply crude to local refineries



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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), on Saturday, threatened to penalise any company that fails to supply local refineries with the agreed crude oil.

The Commission, which made the threat on the heels of notification sent to it by companies on their readiness to start refining crude oil, said failure to supply the agreed quantity of crude, such company will be compelled to pay 50% of the amount per barrel not delivered.

The commission’s Head, Public Affairs and Corporate Communications, Mrs. Olaide Shonola said this in a press statement issued in Abuja.

“A company that fails to comply with the DCSO would be made to pay a penalty of 50% of the Fiscal Price per barrel not delivered,” she said.

She also noted that the NUPRC has restated its determination to apply all required penalties for default and has emphasised that a company that fails to respond to the Request for Quotation (RFQ) within the specified period is liable to pay an administrative fine of USD10,000, while a company that has not complied with its DCSO, where the willing buyer(s) exist will not be granted an export permit.”

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According to the statement, more local refineries have notified the commission on their readiness to begin production soon in the country.

Shonola also revealed that NUPRC was taking all necessary steps within the prescriptions of the Petroleum Industry Act (2021 ) to ensure an adequate and consistent supply of feedstock to operators.

Cautioning that there would be consequences for sabotaging the process, the NUPRC noted that preemptive steps are being taken because it would send wrong and unbecoming signals to the international business community if operators of domestic refineries in one of the world’s largest crude oil producing countries start importing feedstock for their production.

It also said that it was in contemplation of this that Section 109 of the Petroleum Industry Act (PIA) 2021 introduced the Domestic Crude Supply Obligation (DCSO) to Nigeria’s oil industry in a bid to ensure that domestic refineries are not starved of crude oil supply for their operation.

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