Nigerian Producers Supply Only 41% of Offered Crude Oil to Domestic Refineries in Q1
Nigerian crude oil producers supplied only 41 percent of the crude volumes offered to domestic refineries in the first quarter (Q1) of 2026 despite the country’s push to strengthen local refining capacity and reduce dependence on imported petroleum products.
Data released by the Nigerian Upstream Petroleum Regulatory Commission showed that 68.7 million barrels of crude oil were offered to local refineries under the Domestic Crude Supply Obligation framework during the quarter.
However, actual deliveries stood at 28.5 million barrels, representing about 41 percent of the total volumes offered and approximately 46 percent of the 61.9 million barrels allocated to domestic refiners for the period.
The figures highlight the continued challenges facing Nigeria’s domestic crude supply system despite reforms introduced under the Petroleum Industry Act aimed at ensuring adequate feedstock supply for local refineries.
Industry analysts said the shortfall reflects ongoing disagreements between crude producers and refinery operators over pricing structures and commercial terms.
The Domestic Crude Supply Obligation framework was introduced to support local refining by mandating producers to allocate a portion of crude production to domestic processors before export commitments.
Nigeria has intensified efforts to expand domestic refining capacity following the commencement of operations at the Dangote Petroleum Refinery and the rehabilitation of state-owned refineries.
However, concerns over unreliable crude supply have continued to weigh on refinery operations and production planning.
The regulator attributed the low delivery volumes mainly to pricing disputes between upstream producers and local refiners, noting that transactions under the framework remain subject to a “willing buyer, willing seller” arrangement.
Analysts said the development could slow Nigeria’s ambition to retain more value within its oil sector through local refining and downstream processing.
The supply gap also raises concerns about the sustainability of feedstock availability for large-scale refining projects expected to reduce fuel imports and stabilize domestic petroleum supply.
Nigeria, Africa’s largest crude producer, has historically relied heavily on imported refined petroleum products despite its significant oil reserves due to inadequate local refining infrastructure.
The Federal Government has repeatedly emphasized the importance of improving domestic refining capacity as part of broader energy sector reforms aimed at enhancing energy security, reducing foreign exchange pressure and supporting industrial growth.
Market observers said resolving pricing disagreements and ensuring predictable crude supply would be critical to achieving long-term stability in the country’s refining sector.
