Pricing gaps stifle domestic crude supply as refineries receive 46% allocated volumes – Report

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that a pricing gap between crude oil producers and local refiners continues to hinder the Domestic Crude Supply Obligation (DCSO), leaving refineries with less than half of their required feedstock for the first quarter of 2026.

Despite a regulatory mandate intended to bolster local energy sufficiency, the latest DCSO report highlights a disconnect between what is allocated, what is offered by producers, and what is ultimately delivered to the pumps of domestic refineries.

According to the Commission’s Q1 data, February proved particularly challenging for the DCSO framework.

The NUPRC allocated 20.5 million barrels to local refineries, yet producers offered only 19.8 million barrels missing the regulatory target by 700,000 barrels.

More concerning, however, was the actual delivery, which plummeted to just 9.1 million barrels for the month.

March saw a marginal recovery in logistical performance. Actual deliveries rose to 10.1 million barrels, an improvement over the 9.2 million and 9.1 million barrels recorded in January and February, respectively.

During this period, the NUPRC set the allocation at 18.8 million barrels, while producers showed significant surplus intent by offering 23.6 million barrels, an excess of **4.8 million barrels (25.5%)**.

The persistent shortfall between the volumes producers offer and the amounts refineries actually receive remains the primary hurdle.

The NUPRC in a statement on Tuesday attributed this disparity to ongoing pricing disagreements.

Under the current Petroleum Industry Act (PIA) framework, transactions are governed by a willing buyer, willing seller principle. While producers may offer high volumes to fulfill their regulatory obligations on paper, the final sale often collapses when local refiners and upstream producers cannot agree on a commercial price point.

For the entirety of Q1 2026, the Commission allocated 61.9 million barrels to the domestic sector. While producers technically over-complied by offering 68.7 million barrels, the actual conversion into refinery feedstock was only 28.5 million barrels.

This represents a conversion rate of just 36–46% against the total quarterly requirement.

Concludimg the statement, the NUPRC reaffirmed its commitment to national energy security.

The Commission stated it would continue to refine its DCSO methodology to enhance transparency and efficiency, ensuring that the promise of the PIA translates into consistent, physical crude supply for Nigeria’s refining sector.