Nigeria’s domestic refining challenge goes beyond crude oil production, as figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) show that the volume of crude offered to local refineries exceeded actual deliveries in the second quarter of 2026.
However a review of the commission’s second-quarter report showed that oil producers offered about 69.3 million barrels of crude oil and condensate to domestic refiners between April and June, but actual supplies stood at approximately 53.7 million barrels, leaving a gap of about 15.6 million barrels.
The figures highlight a key distinction in Nigeria’s domestic refining arrangements: crude being available or offered to a refinery does not necessarily mean the refinery will receive the full volume it needs.
For the Dangote Petroleum Refinery, producers offered 68.1 million barrels against its stated requirement of 63 million barrels for the quarter.
The refinery accepted 52.6 million barrels, representing about 77 per cent of the volume offered.
This means that although the volume offered exceeded the refinery’s stated requirement, the quantity accepted fell short of that requirement.
The figures do not, on their own, explain every reason for the difference between the volumes offered and accepted.
However, the NUPRC’s report for the first quarter of 2026 identified pricing differences between crude producers and refiners as a major factor behind the gap between offers and actual supplies.
In that quarter, producers offered about 68.7 million barrels to domestic refiners, but only 28.5 million barrels were supplied.
The improvement in deliveries during the second quarter suggests that supply to local refiners increased, but the remaining gap raises questions about how effectively Nigeria’s crude supply arrangements are meeting domestic refining requirements.
Under the domestic crude oil supply framework, producers are required to make crude available to local refiners, while transactions operate on a willing-buyer, willing-seller basis. Consequently, the volume offered does not automatically translate into a completed purchase or delivery.
Investigations by NewsDirect revealed that factors such as differences over prices can affect whether a refinery accepts an offer, while the timing and reliability of deliveries determine whether it can secure the feedstock needed to maintain operations.
Crude quality was also identified as another consideration. Refineries process particular grades and blends, meaning that the suitability of available crude can affect sourcing decisions. Establishing how much this contributed to the second-quarter supply gap, however, would require refinery-specific evidence.
The figures also add context to expectations that local refining should automatically translate into cheaper petrol for Nigerians.
Domestic refining can reduce reliance on imported finished petroleum products, but it does not eliminate the cost of purchasing crude, transporting it, financing transactions and processing it into finished products. The price consumers ultimately pay also depends on distribution costs, market competition and wider movements in crude and petroleum product prices.
Selling crude to domestic refiners below prevailing market value would raise a separate question about who bears the difference and whether any resulting savings reach consumers. Such an arrangement could have fiscal implications, depending on its terms and how the cost is absorbed.
For Nigeria, the challenge is therefore not simply to produce more crude or increase the quantity offered to local refineries. It is also to ensure that available volumes can be delivered in suitable grades and on commercial terms that allow refiners to secure the feedstock they need.
Until supply volumes, refinery requirements and pricing arrangements are better aligned, increased crude production alone may not guarantee consistent deliveries or translate directly into lower petrol prices.
