Nigeria’s crude oil producers supplied domestic refineries with less than half of the volumes allocated under local supply rules in the first quarter of 2026, according to data from the Nigerian Upstream Petroleum Regulatory Commission, highlighting persistent bottlenecks in the country’s refining drive.
The regulator said 61.9 million barrels of crude were allocated to domestic refineries during the quarter under the Domestic Crude Supply Obligation, while producers offered slightly higher volumes of 68.7 million barrels.
Actual deliveries, however, fell sharply short at 28.5 million barrels — equivalent to about 46% of allocated volumes and roughly 41% of the volumes offered.
The gap underscores ongoing challenges in Nigeria’s efforts to boost local refining capacity and cut dependence on imported petroleum products, despite reforms introduced under the Petroleum Industry Act.
Analysts say the shortfall reflects persistent structural frictions between upstream producers and domestic refiners, particularly over pricing. The regulator attributed the weak delivery levels largely to disagreements on crude pricing, noting that transactions continue to be conducted on a “willing buyer, willing seller” basis.
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The supply constraints have reinforced concerns raised by the Dangote Refinery — Africa’s largest — over unreliable access to domestic crude. Limited feedstock availability has constrained refining output, potentially slowing Nigeria’s ambition to retain more value within its oil sector.
Nigeria has long sought to shift from exporting crude and importing refined fuels toward a more self-sufficient model anchored on domestic refining. However, the latest figures suggest that regulatory reforms alone may not be sufficient to align incentives between producers and refiners.
Industry observers note that without clearer pricing frameworks or enforcement mechanisms for domestic supply obligations, tensions are likely to persist, potentially delaying gains in refining capacity utilisation and fuel import substitution.
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The regulator did not indicate any immediate changes to the current supply framework but acknowledged that pricing disputes remain a key obstacle to improving crude delivery perform
