The Federal Govern
ment and Crude Oil Producers in Nigeria have agreed to work toward a sustainable supply of crude oil to local refineries under a market-determined pricing system.
The aim is to ensure that while the operators do business optimally, the refineries are not starved of feedstock.
The agreement, reached at a Virtual Meeting held with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and all the international oil companies (IOCs), was on the status review of the Framework for Seamless Operationalisation of Domestic Crude Oil Supply Obligation Template.
The producers, under the umbrella of the Oil Producers Trade Section (OPTS), agreed to concede to a framework that would be mutually beneficial, ensuring that local refineries are not strangulated due to off-the-curve prices.
Speaking with newsmen, Komolafe explained that contrary to a report that the decision was to placate certain interests, it was indeed targeted at ensuring energy security for the country.
“It is the job of the regulator to interface between the producers and the refiners; it is a delicate balance because we do not want one to overrun the other because that will lead to problem.
“If we don’t have product, then there will be energy gap in supplying the industry and this will not be a palatable situation for all, and if we have robust supply, but they shut down the upstream and we can’t get crude production, then there is also a problem. So, we, as regulator, are simply trying to maintain the delicate balance”, he said.