Nigeria’s plan to strengthen local refining has hit another setback after new figures revealed that domestic refineries received less than half of their allocated crude oil in the first quarter of 2026. The development raises fresh concerns over fuel security, refinery output, and the future of Africa’s largest refining project.
According to official data released by the Nigerian Upstream Petroleum Regulatory Commission, local refineries were allocated 61.9 million barrels of crude oil under the Domestic Crude Supply Obligation during the first three months of the year. Producers offered an even higher volume of 68.7 million barrels. However, actual deliveries reached only 28.5 million barrels.
That means refineries received just 46% of their allocated crude and around 41% of the total volume producers offered.
The figures highlight serious gaps in Nigeria’s efforts to reduce dependence on imported petroleum products. Although reforms under the Petroleum Industry Act were designed to improve domestic crude availability, supply bottlenecks continue to slow progress.
Industry experts say the shortage also validates concerns previously raised by Dangote Refinery over inconsistent crude supply and pricing disputes. Those challenges may reduce production capacity at the massive Lagos-based facility, which many hoped would transform Nigeria into a leading fuel exporter.
Moreover, weaker refinery supply could keep pressure on petrol and diesel prices across Nigeria, where millions of consumers already face rising living costs.
The regulator said pricing disagreements between crude producers and domestic refiners remain the major obstacle. It added that all transactions still operate under a “willing buyer, willing seller” arrangement.
However, analysts argue that without stronger enforcement and clearer pricing mechanisms, Nigeria may struggle to maximise value from its crude resources.
Nigeria remains one of Africa’s top oil producers, yet refining shortages have repeatedly forced the country to import fuel. Consequently, every missed barrel supplied locally represents lost economic value, fewer jobs, and more pressure on foreign exchange reserves.
As 2026 continues, investors and consumers will watch closely to see whether authorities can close the supply gap and help local refineries operate at full capacity.
