Domestic refiners in Nigeria failed to lift crude oil worth an estimated $3.13 billion in the first quarter of 2026, exposing persistent challenges in the country’s domestic crude supply system.
Data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that although crude oil producers made large volumes available under the Domestic Crude Supply Obligation framework, refiners were unable to take delivery of a significant portion due to pricing disagreements, crude grade mismatches and other structural bottlenecks.
The figures revealed that producers offered a total of 68.7 million barrels of crude between January and March 2026, while 61.9 million barrels were officially allocated to local refineries.
However, actual refinery offtake stood at only 28.5 million barrels, leaving about 40.3 million barrels unutilised during the three-month period.
Using conservative market estimates, the unlifted crude is valued at approximately $3.13 billion.
The data indicates a weak supply conversion rate of between 36 and 46 per cent, despite ongoing efforts by regulators to strengthen local refining and reduce dependence on imported petroleum products.
According to the NUPRC, the figures reflect the implementation of the Domestic Crude Supply Obligation under the Petroleum Industry Act.
In a statement issued by the commission’s Head of Media and Corporate Communications, Eniola Akinkuotu, the regulator said producers exceeded the allocated volumes but actual deliveries to refiners remained low.
“A total of 61.9 million barrels were allocated to domestic refineries during the quarter, while producers collectively offered 68.7 million barrels. However, actual supply to local refineries was 28.5 million barrels,” the statement noted.
A monthly breakdown showed that in January, refiners lifted only 9.2 million barrels out of the 25.3 million barrels offered, leaving a gap of 16.1 million barrels valued at about $1.09 billion.
In February, refiners took delivery of 9.1 million barrels from 19.8 million barrels offered, leaving 10.7 million barrels unused, estimated at $749 million.
Similarly, in March, refiners lifted 10.1 million barrels out of the 23.6 million barrels available, resulting in an unutilised volume of 13.5 million barrels worth around $1.28 billion.
Industry experts say the situation highlights ongoing inefficiencies in Nigeria’s crude supply framework, despite significant investments in local refining capacity, including the operations of the Dangote Petroleum Refinery and several modular refineries.
The NUPRC attributed the low refinery uptake to commercial negotiations under the “willing buyer, willing seller” arrangement, as well as disputes over pricing and refinery compatibility with certain crude grades.
The Domestic Crude Supply Obligation policy was introduced to ensure local refineries have adequate feedstock and to support Nigeria’s push for energy self-sufficiency.
However, operators in the sector have continued to demand reforms, including the creation of a domestic crude pricing benchmark that better reflects local market realities.
Speaking on the development, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, said pricing structures and crude quality differences were pushing local refiners, particularly the Dangote refinery, to source more crude from international markets.
According to him, Nigerian producers largely sell Brent-linked crude at premium prices, while imported West Texas Intermediate crude is often more suitable and commercially attractive for some refineries.
“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. It is based on commercials,” Idoko said.
He argued that the current pricing structure places domestic refiners at a disadvantage and called for a local pricing framework that would reduce exposure to international market risks and improve competitiveness.
Industry stakeholders warn that unless the supply framework is restructured, Nigeria’s ambition to boost local refining capacity and reduce dependence on imported fuel may continue to face setbacks.
