Nigerian domestic refiners failed to lift an estimated US$3.13 billion worth of crude oil in the first quarter of 2026, according to official data, exposing deep tensions in the country’s drive to boost local refining and reduce dependence on imported fuel.
Figures released by the Nigerian Upstream Petroleum Regulatory Commission showed that crude producers made 68.7 million barrels available to local refiners between January and March under the Domestic Crude Supply Obligation framework.
But refiners took delivery of only 28.5 million barrels, leaving a gap of more than 40 million barrels despite repeated government pledges to strengthen domestic refining capacity.
The unutilised crude was valued at roughly US$3.13 billion based on average international oil prices during the period.
The data underscores persistent bottlenecks in Africa’s largest oil producer, where authorities have sought to position local refining as a cornerstone of economic reform and energy security.
More Read
Nigeria has long relied heavily on imported refined petroleum products despite being one of the continent’s top crude exporters.
The shortfall comes as the country ramps up investments in refining infrastructure, led by the giant Dangote Petroleum Refinery and several modular refinery projects expected to reduce fuel imports and ease pressure on foreign exchange reserves.
In a statement, the NUPRC said the figures reflected implementation challenges under the Petroleum Industry Act, which introduced the Domestic Crude Supply Obligation to guarantee feedstock for local refineries.
More Read
“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,” the commission said.
“However, actual supply to local refineries was 28.5 million barrels, translating to a supply conversion rate of 36–46 percent as of the end of the first quarter 2026.”
According to the regulator, several factors contributed to the weak uptake, including pricing disagreements, crude grade mismatches and the “willing buyer, willing seller” framework governing transactions between producers and refiners.
Industry analysts say those issues continue to undermine refinery utilisation rates even as Nigeria pushes for self-sufficiency in petroleum products.
The monthly breakdown showed that refiners lifted only 9.2 million barrels out of 25.3 million barrels offered in January, leaving a deficit valued at approximately US$1.09 billion.
In February, producers offered 19.8 million barrels, but refiners accepted only 9.1 million barrels, leaving a gap estimated at $749 million.
March recorded another shortfall, with 13.5 million barrels remaining unlifted after refiners took 10.1 million barrels from 23.6 million barrels offered.
The Crude Oil Refiners Association of Nigeria blamed the situation partly on commercial pricing structures that make imported crude more attractive to some local refiners.
CORAN publicity secretary Eche Idoko said Nigerian producers typically sell crude linked to Brent prices at a premium, while some refineries prefer cheaper grades such as U.S. West Texas Intermediate crude.
“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,” Idoko said.
“So producers sell more Brent crude at a premium, but imports from other countries are WTI, another grade that is utilised by the refinery.”
He called for a domestic pricing benchmark tailored to Nigeria’s refining realities, arguing that local refiners should not face the same international pricing and insurance burdens as foreign buyers.
Analysts warn that unless Nigeria reforms its domestic crude supply system, the country could struggle to fully benefit from its expanding refining capacity.
The latest figures raise broader questions over whether existing supply arrangements can support the government’s ambitions to end chronic fuel import dependence and achieve long-term energy security.
