The Nigerian Upstream Petroleum Regulatory Commission is working on a domestic crude oil and gas swap arrangement aimed at reducing supply costs and improving feedstock availability for local refineries.
The proposed framework is expected to strengthen compliance with the Domestic Crude Supply Obligation and Domestic Gas Supply Obligation while reducing the need to transport crude over long distances to meet refinery requirements.
The NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed this during a courtesy visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority in Abuja on Thursday.
According to the commission, consultations are already underway with relevant industry stakeholders, including the Gas Aggregation Company Nigeria Limited, to determine how the proposed swap mechanism will operate.
Under the arrangement, producers located close to export terminals could fulfil the domestic supply obligations of producers located nearer to refineries, allowing the parties to offset their respective obligations rather than physically transporting crude across the country.
Eyesan said the approach could lower logistics costs and improve the availability of locally produced crude for domestic refiners. “Instead of trying to move from one end to the other, we just agree on a swap arrangement,” she explained.
The proposal comes as domestic crude supply to Nigerian refineries has improved significantly. NUPRC data showed that 53.7 million barrels were supplied to local refiners between April and June 2026, representing 97.4 per cent compliance with the DCSO in the second quarter.
Despite the improvement, some Nigerian refiners continue to import crude, while operators have complained that locally supplied crude can be priced at a premium, making imported feedstock more competitive in some circumstances.
The NUPRC said the continued reliance on imported crude reinforces the need for a more efficient domestic allocation system. However, Eyesan stressed that discussions on the swap arrangement remain at an early stage and that the necessary modalities must be finalised before implementation.
The NMDPRA Chief Executive, Rabiu Abdullahi Umar, supported stronger coordination between the regulators but highlighted crude pricing as a major factor in the viability of domestic refining. He noted that although the Petroleum Industry Act provides for willing-buyer, willing-seller transactions, the price of domestic crude remains critical to refinery economics.
The NMDPRA also backed the establishment of strategic petroleum reserves, arguing that stronger national stockpiles would improve energy security and support greater price stability as Nigeria’s refining capacity expands.