Local refineries get 53.7m barrels as crude supply hits 97.4%

Nigeria’s domestic refineries received 53.7 million barrels of crude oil and condensate in the second quarter of 2026, representing 97.4 per cent compliance with the Domestic Crude Supply Obligation (DCSO) and signalling a significant improvement in the feedstock available for the country’s expanding refining industry.

The latest figures released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) show that crude supply to local refiners remained close to quarterly allocations between April and June, strengthening the prospects of higher domestic fuel production and reduced dependence on imported refined petroleum products.

The development comes as Nigeria’s crude oil production continues to recover, with combined crude oil and condensate output rising to 1.735 million barrels per day in June, the highest level recorded in the five months covered by NUPRC’s latest production data.

The Q2 DCSO statistics, issued under Section 109 of the Petroleum Industry Act (PIA), also point to the growing importance of reliable domestic crude supply as Nigeria moves from a predominantly import-dependent fuel market towards becoming a regional refining and petroleum-products supplier.

NUPRC said the improvement in compliance was supported by increased domestic oil production and the emergence of long-term crude supply agreements backed by bankable Sales and Purchase Agreements between producers and local refineries.

The Commission said it administers the DCSO through monthly consultations with crude producers and licensed domestic refineries, under a “willing buyer, willing seller” arrangement provided for by the PIA.

The quarterly performance, however, varied significantly from month to month.

In April, producers were allocated 18.13 million barrels but offered 19.31 million barrels, while local refineries ultimately received 20.88 million barrels, representing 114.9 per cent performance against the allocation.

Performance weakened sharply in May. Although producers were allocated 18.78 million barrels and offered 23.19 million barrels, local refiners received only 14.23 million barrels, equivalent to 75.8 per cent compliance.

Supply recovered in June, when 18.17 million barrels were allocated, and producers offered 26.84 million barrels. Local refiners took 18.61 million barrels, representing 102.4 per cent performance against the monthly allocation.

The figures highlight an important distinction between crude volumes offered by producers and volumes ultimately received by refiners. Under the willing-buyer, willing-seller framework, the volume offered does not automatically translate into an equivalent volume purchased.

The Dangote Refinery remained by far the largest recipient and the biggest driver of domestic crude demand during the quarter.

The refinery required 63 million barrels during the period, while producers offered 68.1 million barrels. However, it ultimately accepted 52.6 million barrels, representing 78 per cent of the crude offered to it.

The gap between crude demand, volumes offered and volumes actually accepted underscores the scale of the supply-chain challenge facing Nigeria’s refining ambitions. While crude production is rising and domestic supply compliance is improving, ensuring that available crude is delivered, commercially accepted and efficiently transported to refineries remains critical to sustaining refinery utilisation.

The latest development is particularly significant because Nigeria’s refining landscape is undergoing a structural shift following the emergence of the Dangote Refinery and the revival of other domestic refining facilities.

Higher domestic crude availability could allow refiners to operate more consistently, increase local production of petrol, diesel, aviation fuel and other petroleum products, reduce pressure on foreign exchange arising from product imports and strengthen Nigeria’s position as a supplier to neighbouring African markets.

For the upstream sector, the improvement in production also creates a stronger link between oil-sector investment and downstream industrialisation. Higher crude output provides additional feedstock for domestic refineries while creating greater potential for government revenue, export earnings and investment across the petroleum value chain.

NUPRC said it would continue enforcing the DCSO while sustaining efforts to increase crude oil production as part of the Federal Government’s objective of achieving energy sufficiency.

Nigeria’s combined crude oil and condensate production increased from 1.483 million barrels per day in February to 1.546 million barrels per day in March, 1.663 million barrels per day in April, 1.700 million barrels per day in May and 1.735 million barrels per day in June.

The June output represented a 2.2 per cent month-on-month increase and marked the strongest production level in the five months.

The production recovery is important for the downstream sector because the success of Nigeria’s refining ambitions ultimately depends on the availability of competitively priced domestic crude.

Nigeria has historically exported crude oil while importing a substantial proportion of the refined products consumed locally, creating a costly mismatch that exposed the economy to international product prices, shipping costs and foreign exchange pressures.

The emergence of large-scale domestic refining capacity is beginning to reverse that structure, but the transition will require sustained crude production, reliable evacuation infrastructure, competitive commercial arrangements and efficient logistics.

The government has also identified gas as another pillar of the country’s energy and industrialisation strategy. NUPRC declared Nigeria’s crude oil and condensate reserves at 37.01 billion barrels as of January 1, 2026, alongside 215.19 trillion cubic feet of natural gas reserves.