The Nigerian Upstream Petroleum Regulatory Commission has started consultations on a proposed crude oil and gas supply framework that could allow producers to swap domestic supply obligations and reduce transportation costs.
Commission Chief Executive Oritsemeyiwa Eyesan disclosed the proposal during a meeting with the Nigerian Midstream and Downstream Petroleum Regulatory Authority in Abuja.
Under the emerging arrangement, producers with domestic supply obligations could exchange those obligations based on the location of their crude and the proximity of other producers to local refineries.
The system is intended to avoid unnecessary movement of crude over long distances when another producer is better positioned to supply a particular domestic buyer.
Companies involved would settle the exchanged obligations through a netting mechanism.
Eyesan said the framework was still at an early stage and would be developed in consultation with industry stakeholders.
The arrangement is expected to support compliance with both the Domestic Crude Supply Obligation and the Domestic Gas Supply Obligation.
The gas component would involve coordination with the Gas Aggregation Company of Nigeria.
NUPRC data showed that domestic refineries received about 53.7 million barrels of crude between April and June 2026, representing 97.4 per cent performance against second quarter domestic supply requirements.
Despite the improvement, some local refineries continued to import crude.
Eyesan said the commission was therefore examining ways to make domestic supply more efficient and commercially practical.
NMDPRA Chief Executive Rabiu Umar said pricing remained an important factor because the Petroleum Industry Act requires transactions to be conducted on a willing buyer, willing seller basis.
The regulators also discussed strategic petroleum reserves and closer institutional coordination across the upstream, midstream and downstream segments.
Officials said the proposed swap mechanism could reduce logistics costs, improve supply reliability and strengthen the domestic refining market if successfully implemented.
