The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is developing a framework that would allow oil producers to swap domestic crude supply obligations in a bid to reduce transportation costs and ensure more crude reaches local refineries.
NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed the plan during a meeting with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja.
Under the proposed arrangement, producers would be able to exchange supply responsibilities where their crude is located far from their assigned domestic buyers. Companies closer to particular refineries could supply the crude instead, while the parties settle their respective obligations through a netting arrangement.
Eyesan said the approach could eliminate the need to transport crude across long distances when another supplier is better positioned to meet the same requirement.
The proposed framework is also expected to strengthen compliance with the Domestic Crude Supply Obligation (DCSO) and Domestic Gas Supply Obligation (DGSO). NUPRC said the gas component would be developed in coordination with the Gas Aggregation Company of Nigeria.
The initiative comes as domestic crude deliveries to Nigerian refineries have improved significantly. NUPRC data showed that local refineries received 53.7 million barrels of crude between April and June 2026, representing 97.4 per cent compliance with the DCSO during the second quarter.
Despite the improvement, some local refiners still rely on imported crude, prompting the regulator to consider additional measures to make domestic supply more efficient.
NUPRC and NMDPRA also agreed to strengthen cooperation across the petroleum value chain. NMDPRA Chief Executive, Rabiu Umar, commended the upstream regulator’s efforts to improve crude supply to domestic refineries and its handling of the 2025 licensing round.
Umar, however, stressed that pricing would remain important in domestic crude transactions, noting that the Petroleum Industry Act provides for deals based on willing buyer and willing seller principles.
He also backed the development of strategic petroleum reserves, saying they could improve Nigeria’s energy security and help moderate price volatility.
The proposed crude swap system is expected to become part of broader regulatory efforts to improve coordination between Nigeria’s upstream, midstream and downstream petroleum sectors.
