The Federal Government has stated that it supplied a total of 67,657,559 million barrels of crude oil to local refineries in Nigeria for processing between January and August 2025. While impressive, this figure falls far short of actual need, as demand continues to outstrip supply.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the allocation was made in-line with the Petroleum Industry Act (PIA) 2021 and the Domestic Crude Supply Obligation (DCSO) policy.
The Head of Media and Strategic Communications at the NUPRC, Eniola Akinkuotu, stated “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,”.
The supplies went to both modular and state-owned refineries, including Waltersmith, Aradel Energy, and Nigerian National Petroleum Company (NNPC) facilities.
However, the allocation fell far below refiners’ demand. Local processors had requested about 123.48 million barrels for the first half of 2025 but received only 55.82 million barrels less—representing a shortfall of about 45 per cent.
The DCSO, introduced under the PIA, requires upstream producers to reserve part of their crude for domestic refining before exports. The policy was designed to guarantee feedstock for local processors and reduce Nigeria’s heavy reliance on imported petroleum products.
Earlier this year, the NUPRC projected that refineries such as Port Harcourt, Warri, and Dangote would require about 770,500 barrels per day, translating to 23.8 million barrels monthly, or 123.4 million barrels for the first half of the year. But actual deliveries fell well below this benchmark.
Meanwhile, Nigeria’s crude and condensate production rose to 1.63 million barrels per day in August, much of which was still shipped abroad.
For months, local refinery operators have decried their inability to access crude. Many allege that producers prefer selling to international buyers who pay in dollars, leaving domestic refiners squeezed by foreign exchange pressures.
The Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), Eche Idoko, said in July that the implementation of the DCSO and related policies had failed to guarantee sufficient supplies to indigenous refiners.
“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 producers, while local refiners—hampered by currency volatility—struggle to secure crude allocations legally due to unfavorable pricing dynamics.
Industry data further showed that in the first quarter of 2025, about 82 per cent of Nigeria’s crude output was exported, leaving local refineries with limited feedstock despite government assurances.
Analysts warn that the mismatch between crude allocations and demand could derail Nigeria’s refining ambitions, especially at a time when multi-billion-dollar investments—such as the Dangote Refinery and rehabilitated state-owned plants—are expected to slash the country’s import bill for refined products.
While the NUPRC maintains that allocating over 67 million barrels in eight months demonstrates its commitment to domestic refining, industry stakeholders insist that more decisive action is needed.
They argue that bridging the crude supply gap will require stronger enforcement of DCSO provisions, transparent pricing models, and incentives that balance the interests of producers and refiners.
