Domestic refiners in Nigeria left an estimated $3.13bn worth of crude oil unlifted in the first quarter of 2026, highlighting deepening inefficiencies in the country’s crude supply framework.
Analysis of data released by the Nigerian Upstream Petroleum Regulatory Commission by our correspondent on Wednesday showed that while crude producers made significant volumes available under the Domestic Crude Supply Obligation, refiners were unable to take delivery of a large portion due to persistent commercial and structural challenges.
The latest data showed a significant mismatch between crude availability and actual refinery offtake, despite regulatory efforts to deepen domestic refining. The figures indicate that producers collectively made available 68.7 million barrels of crude between January and March, far above allocated requirements, yet refiners struggled to convert the offers into actual deliveries.
This translates to a weak conversion rate of about 36–46 per cent, underscoring persistent structural and commercial bottlenecks in the domestic crude supply chain. Findings showed that the total gap between crude offered and actual refinery offtake stood at 40.3 million barrels in the three-month period, with the shortfall valued at about $3.13bn using conservative average prices.
Figures released by the commission indicated that while 61.9 million barrels were allocated to domestic refiners during the period, oil producers collectively offered 68.7 million barrels.
However, actual deliveries lagged significantly, with refiners lifting just 28.5 million barrels, indicating that crude producers supplied local refineries with less than half of the volumes allocated under the country’s domestic crude supply rules.
The development underscores a persistent gap between crude availability and actual refinery intake, raising fresh concerns over feedstock adequacy for Nigeria’s refining ambitions.
In the press statement earlier issued by the commission, the NUPRC Head of Media and Corporate Communications, Eniola Akinkuotu, said the data reflected ongoing efforts to enforce the Domestic Crude Supply Obligation in line with the Petroleum Industry Act.
The statement read, “The Nigerian Upstream Petroleum Regulatory Commission has released the statistics on the enforcement of the Domestic Crude Supply Obligation in accordance with the provisions of the Petroleum Industry Act.
“A summary of the monthly allocation shows that 61.9 million barrels of crude oil were allocated to domestic refineries during the quarter, while producers collectively offered a higher volume of 68.7 million barrels. However, actual supply to local refineries was 28.5 million barrels, translating to a supply conversion rate of 36-46 per cent as of the end of the first quarter 2026.”
A breakdown of the value of rejected crude revealed that in January, producers offered 25.3 million barrels, but refiners lifted only 9.2 million barrels, leaving a shortfall of 16.1 million barrels valued at approximately $1.09bn.
In February, out of the 19.8 million barrels offered, refiners took 9.1 million barrels, resulting in a gap of 10.7 million barrels worth about $749m. Similarly, in March, refiners lifted 10.1 million barrels from the 23.6 million barrels offered, leaving 13.5 million barrels unutilised, with an estimated value of $1.28bn.
The data underscores a persistent disconnect between crude supply and refinery demand, despite regulatory efforts to prioritise local refining under the Petroleum Industry Act, 2021.
The NUPRC has attributed the shortfall to pricing disputes, crude grade mismatches, and the “willing buyer, willing seller” framework, which leaves transactions subject to commercial negotiations rather than strict enforcement.
Experts say the situation has continued to limit refinery utilisation and slow Nigeria’s drive towards energy self-sufficiency, even as investments in refining capacity, led by the Dangote Petroleum Refinery and several modular plants, gather momentum.
The Domestic Crude Supply Obligation was introduced to ensure that local refineries have adequate access to feedstock and to reduce dependence on imported petroleum products.
However, the latest figures suggest that implementation challenges persist, with large volumes of crude remaining unlifted despite apparent availability. Operators have repeatedly called for reforms, including the introduction of a domestic pricing benchmark and improved alignment between crude grades supplied and refinery configurations.
The development comes at a time when Nigeria is seeking to ramp up local refining capacity and conserve foreign exchange, raising fresh concerns over whether current supply frameworks can support the country’s long-term energy security goals.
Commenting, the Crude Oil Refiners Association of Nigeria has attributed the growing reliance of the Dangote Petroleum Refinery on imported crude to commercial pricing structures and crude grade differentials in the domestic market.
Speaking in an interview with our correspondent, CORAN Publicity Secretary, Eche Idoko, said the refinery’s preference for imported crude is largely driven by economics and product compatibility rather than lack of demand for local supply.
He explained that Nigerian producers predominantly sell Brent-linked crude at a premium, while the refinery often imports West Texas Intermediate crude, which better aligns with its operational configuration.
Idoko said, “So one of the major issues we are having with Dangote buying more crude from the U.S is because of the type of products offered and the pricing. It is based on commercials. So producers sell more Brent crude at a premium, but the import from other countries is WTI, another grade that is utilised by the refinery.”
He argued that the current pricing framework places domestic refiners at a disadvantage compared to international sourcing options, particularly in terms of competitiveness and risk exposure. According to him, a more tailored pricing mechanism is needed to reflect Nigeria’s local refining realities and reduce reliance on external markets.
Idoko said, “All we have said is that for local refineries, in Nigeria, as they do in other climes, why can’t we have a pricing index that reflects our peculiarity, and we don’t have to face the international insurance risk. Dangote goes out to buy more crude from other countries because of the Brent and premium pricing template by local producers.”
He stressed that aligning crude pricing to domestic refining needs could help strengthen local supply chains and reduce the growing dependence on imported feedstock.
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