Nigeria Supplies 67.6m Barrels to Local Refineries, 45% Below Demand

Nigeria allocated 67.6 million barrels of crude oil to local refineries between January and August 2025, representing 45 per cent below industry demand and casting fresh doubts over the country’s refining self-sufficiency drive.

Data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that 67,657,559 barrels of crude oil were delivered to local processors between January and August 2025.

However, refiners had requested 123,480,500 barrels for the period, leaving a supply gap of 55,822,941 barrels, or about 45 per cent.

The crude was allocated to both modular and state-owned refineries, including Waltersmith, Aradel Energy, and facilities under the Nigerian National Petroleum Company Limited (NNPCL).

The shortfall highlights persistent challenges with the Domestic Crude Supply Obligation (DCSO), a framework under the Petroleum Industry Act (PIA) 2021 designed to guarantee feedstock for local refiners. Despite repeated directives from the regulator, enforcement has been weak, and producers continue to prioritise exports.

Nigeria’s crude and condensate output climbed to 1.63 million barrels per day in August, yet much of this volume was shipped abroad. In Q1 2025 alone, 82 per cent of national production was exported.

Industry stakeholders say dollar-paying international buyers remain more attractive to producers than local refiners, who are constrained by naira volatility.

The “willing buyer, willing seller” pricing model, intended to liberalise the market, has left refiners unable to compete with foreign traders.

Eche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria, previously noted that this contradiction undermines Nigeria’s drive toward domestic refining.

“The principle was meant to create competitiveness. But in practice, it disadvantages local refiners who cannot match dollar-based offers,” he said.

Analysts warn that the crude allocation gap threatens billions of dollars invested in modular and large-scale refineries, including the government-owned Port Harcourt and Warri plants and the privately-owned Dangote Refinery.

Without stronger enforcement mechanisms, transparent pricing models, and policy consistency, Nigeria’s refining revolution could stall.

While the NUPRC maintains that its allocation of more than 67 million barrels in eight months demonstrates its commitment, refiners argue that partial deliveries are insufficient to sustain operations at optimal levels.

The supply imbalance underscores the urgency of aligning Nigeria’s production policies with its domestic refining ambitions, especially as the country continues to face high import bills for refined petroleum products.