- NUPRC has begun talks on a domestic crude swap system
- The plan aims to cut supply costs and improve refinery access to crude
- Regulators say better pricing and supply are key to expanding local refining
The Nigerian Upstream Petroleum Regulatory Commission has started discussions with oil industry stakeholders on a proposed domestic crude oil and gas swap system designed to lower supply costs and improve crude availability for Nigerian refineries.
Eko Hot Blog gathered that the initiative is expected to strengthen compliance with the Domestic Crude Supply Obligation and Domestic Gas Supply Obligation while reducing unnecessary movement of crude across long distances.
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NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed the development during a visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority in Abuja.
According to a statement issued by NUPRC Head of Media and Corporate Communications, Eniola Akinkuotu, Eyesan said the commission was working with relevant industry players to establish how the proposed swap arrangement would operate.
She explained that the system could allow producers located near export terminals to fulfil the domestic supply responsibilities of producers whose operations are closer to local refineries.
Under the proposed arrangement, crude would not necessarily have to be transported from one end of the country to another. Instead, producers and refiners could offset their respective supply obligations through an agreed mechanism.
Eyesan said the arrangement could improve compliance with domestic crude and gas supply requirements while making the distribution process more efficient.
The proposal comes as domestic crude deliveries to Nigerian refineries have improved significantly. NUPRC figures showed that local refiners received 53.7 million barrels of crude between April and June 2026, representing 97.4 per cent compliance with the Domestic Crude Supply Obligation during the second quarter.
Despite the improvement, some Nigerian refineries continue to import crude because domestic supplies have not always been sufficient or competitively priced.
Refiners have also complained that some domestic crude suppliers charge premium prices, making locally produced crude more expensive than imported alternatives in certain circumstances.
Eyesan said the continued reliance on imported crude showed the need for regulators to develop more efficient ways of connecting domestic producers with refineries.
She stressed, however, that the proposed swap mechanism was still being developed and would not be implemented until the necessary operational details had been agreed upon.
The NUPRC chief also pledged closer cooperation with the NMDPRA in addressing challenges across Nigeria’s petroleum value chain.
In response, NMDPRA Chief Executive Rabiu Abdullahi Umar congratulated the upstream regulator on the outcome of its 2025 licensing round and praised its efforts to improve enforcement of domestic crude supply obligations.
Umar noted that crude pricing remained a major issue for local refiners. He explained that although the Petroleum Industry Act allows transactions on a willing-buyer, willing-seller basis, the price at which crude is supplied remains crucial to the sustainability of domestic refining.
The NMDPRA also backed the establishment of strategic petroleum reserves, saying they could improve energy security and help stabilise prices.
The proposed swap scheme comes as Nigeria’s refining capacity expands, increasing pressure on regulators to ensure that domestic crude obligations result in reliable and affordable feedstock for local refineries.
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