Nigeria's petroleum regulators are considering a major shift in how crude oil and gas are supplied to local users, as authorities explore a domestic exchange system designed to reduce logistics costs and improve access to feedstock for refineries and industrial consumers.

The proposal, currently under discussion among industry stakeholders, would allow oil and gas operators to exchange supply obligations based on location and operational convenience rather than physically transporting products across long distances.

The initiative was revealed by the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Oritsemeyiwa Eyesan, during a meeting with the leadership of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja.

According to Eyesan, the planned arrangement is intended to address long-standing inefficiencies within the domestic supply chain while helping producers meet statutory obligations to local refiners and gas consumers.

The model, she explained, would operate on a practical principle: companies with supply commitments in one location could exchange those obligations with operators positioned closer to the intended recipients, thereby reducing transportation challenges and associated costs.

Industry experts say such a system could help eliminate avoidable movements of crude oil across the country, lower operational expenses and improve the speed at which domestic consumers receive supplies.

The proposal comes as regulators seek new ways to maximise the impact of Nigeria's Domestic Crude Supply Obligation and Domestic Gas Supply Obligation frameworks, which were established to ensure adequate availability of petroleum resources for local consumption.

Under the emerging framework, the Gas Aggregation Company of Nigeria Limited (GACN) is expected to play a coordinating role alongside regulators and industry participants.

Although discussions remain at a formative stage, the proposal is already attracting attention because of its potential implications for local refining operations.

Recent industry data suggest that efforts to prioritise domestic refining are beginning to yield results.

Official figures show that local refiners received approximately 53.7 million barrels of crude oil during the second quarter of 2026, representing one of the strongest domestic supply performances recorded in recent years.

Despite that progress, supply gaps remain, and some operators continue to rely on imported crude feedstock to sustain operations.

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Analysts argue that improving supply efficiency has become increasingly important as Nigeria pushes to expand refining capacity and reduce dependence on imported petroleum products.

Eyesan said consultations were ongoing to determine the most effective structure for the initiative and to ensure broad industry participation before implementation.

She also emphasised the importance of cooperation between regulatory agencies, noting that stronger coordination would be critical to achieving the objectives of ongoing reforms in the petroleum sector.

The NMDPRA, for its part, signalled support for measures aimed at improving domestic energy security.

Its Chief Executive, Rabiu Abdullahi Umar, commended the NUPRC for strengthening enforcement of domestic crude supply obligations and improving regulatory oversight within the upstream sector.

However, he pointed out that pricing remains one of the most contentious issues in domestic supply arrangements.

According to him, while the Petroleum Industry Act promotes transactions on a willing-buyer, willing-seller basis, disagreements over pricing mechanisms continue to influence the relationship between producers and local refiners.

He argued that addressing such concerns would be essential if Nigeria is to achieve a stable and efficient domestic energy market.

Umar also renewed calls for the establishment of strategic petroleum reserves, describing them as a critical safeguard against supply disruptions and market volatility.

As Nigeria seeks to strengthen its refining industry and maximise the benefits of recent energy-sector reforms, regulators appear increasingly focused on practical solutions that can improve resource allocation without requiring major new infrastructure investments.

If adopted, the proposed crude and gas exchange model could represent a significant departure from traditional supply arrangements, offering operators greater flexibility while helping the government achieve its broader goal of ensuring that more of Nigeria's oil and gas resources are processed and consumed within the country.