The Nigerian Upstream Petroleum Regulatory Commission has begun consultations with industry stakeholders on a proposed domestic crude oil and gas swap arrangement aimed at reducing supply costs and ensuring more crude is available to Nigerian refineries.

The NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed this during a visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority in Abuja.

She explained that the proposed arrangement would allow crude producers to meet their Domestic Crude Supply Obligations through a swap mechanism, rather than physically transporting crude over long distances.

Under the proposed system, a producer located near an export facility could effectively meet the domestic supply obligation of another producer located closer to a Nigerian refinery. The parties would then net off their respective obligations, reducing unnecessary transportation costs.

Eyesan said the arrangement would also support compliance with the Domestic Gas Supply Obligation and involve the Gas Aggregation Company Nigeria Limited.

The proposal comes as domestic crude deliveries to Nigerian refineries have improved. NUPRC data showed that 53.7 million barrels of crude were supplied to local refineries between April and June 2026, representing 97.4 per cent performance under the Domestic Crude Supply Obligation during the second quarter.

Despite the improvement, some Nigerian refineries continue to import crude to sustain operations. Refiners have also complained that locally supplied crude can sometimes be more expensive than imported alternatives because of premium pricing.

Eyesan said the continued reliance on imports made it necessary to explore more efficient ways of allocating and delivering domestic crude to refineries.

However, she stressed that the swap proposal is still at an early consultation stage, with the specific modalities yet to be finalised.

The NMDPRA Chief Executive, Rabiu Abdullahi Umar, welcomed the proposal but noted that pricing remains critical to the viability of domestic refining. He also expressed support for strategic petroleum reserves to strengthen Nigeria’s energy security and contribute to price stability.