Domestic Refineries’ Crude Supply Hits 67.6m Barrels — FG

The Federal Government has disclosed that a total of 67,657,559 barrels of crude oil were supplied to local refiners for processing between January and August 2025.

This figure, confirmed by the Nigerian Upstream Petroleum Regulatory Commission, highlights ongoing challenges in bridging the crude allocation gap facing indigenous refineries despite Nigeria’s rising production levels.

Speaking in Abuja on Sunday, the Head of Media and Strategic Communications at the NUPRC, Eniola Akinkuotu, said the crude allocation was made in line with the Petroleum Industry Act 2021 and the Domestic Crude Supply Obligation policy.

According to him, the barrels were delivered to both modular and state-owned refining facilities, including Waltersmith, Aradel Energy, and refineries under the Nigerian National Petroleum Company Limited.

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“A total of 67,657,559 barrels were delivered to local refiners between January and August this year. All refiners got that amount within the eight-month period,” Akinkuotu stated.

However, the volume supplied fell short of refiners’ demand by a wide margin. Local processors had requested 123,480,500 barrels for the first half of 2025, meaning they received 55,822,941 barrels—or about 45 per cent—less than required to meet their refining targets.

The DCSO framework, introduced under the PIA, mandates upstream producers to reserve a portion of their crude for domestic processors before exporting, with sanctions for non-compliance. The policy was designed to guarantee feedstock to local refiners and reduce reliance on imported petroleum products.

Earlier this year, the NUPRC projected that refineries such as Port Harcourt, Warri, Dangote, and others would need 770,500 barrels per day, translating to 23.8 million barrels monthly, or 123.4 million barrels for the first half of 2025.

Yet, actual deliveries have not matched these forecasts. Instead, Nigeria’s crude and condensate production climbed to 1.63 million barrels per day in August, with much of it still destined for export.

For months, refinery owners have lamented difficulties in accessing crude locally. They allege that producers prefer selling to international buyers who pay in dollars, leaving domestic refiners struggling under exchange rate pressures.

The Publicity Secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, said in July that Nigeria’s quest for self-sufficiency in petroleum refining had been undermined by policy ambiguities and economic contradictions. He faulted the implementation of the DCSO and the Domestic Crude Refining Requirement, saying local refiners remain trapped by the “willing buyer, willing seller” pricing model.

“The willing buyer, willing seller principle was meant to create competitiveness. But in practice, it disadvantages local refiners who cannot match dollar-based offers from international traders,” Idoko said.

According to him, foreign buyers’ access to hard currency makes them more attractive to upstream producers, while local refiners—hampered by currency volatility—are often priced out of the very crude they are entitled to under Nigerian law. “This market liberalisation paradoxically undermines the goal of domestic refining self-sufficiency,” he added.

Despite policy commitments, the reality is that Nigeria still exports most of its crude. Data showed that in the first quarter of 2025 alone, 82 per cent of the country’s production went abroad, even as local refiners battled shortages.

Industry analysts warn that the imbalance could stall Nigeria’s refining revolution, where both state-owned and privately-owned plants are expected to reduce the huge import bill for refined petroleum products.

The NUPRC has repeatedly directed oil producers to comply with the DCSO, but enforcement has remained weak. Compliance levels have not met expectations, despite threats of sanctions.

The regulator insists that its allocation of over 67 million barrels in eight months demonstrates a commitment to domestic refining. However, refiners argue that partial allocations cannot support efficient operations or justify the billions invested in local refining capacity.

Industry stakeholders say bridging the crude allocation gap will require more than directives. Stronger enforcement mechanisms, transparent pricing models, and government-backed incentives may be needed to balance producer and refiner interests.