Pricing disputes between oil producers and local refiners deepen supply gap, raising fresh concerns over domestic refining capacity……
Nigeria’s drive to boost local refining has hit another obstacle, as crude oil producers delivered less than half of the volumes allocated to domestic refineries in the first quarter of 2026.
New data from the Nigerian Upstream Petroleum Regulatory Commission shows that only 28.5 million barrels of crude were supplied locally during the period far below the 61.9 million barrels allocated under the Domestic Crude Supply Obligation (DCSO).
Even more striking, producers had offered a higher volume of 68.7 million barrels, yet actual deliveries lagged significantly behind.
The figures translate to just 46% of allocated volumes and about 41% of what was made available by producers, exposing a persistent disconnect in Nigeria’s oil supply chain.
At the heart of the issue, according to the regulator, is a pricing standoff between upstream producers and domestic refiners.
The DCSO framework established under the Petroleum Industry Act is designed to guarantee sufficient crude supply to local refineries, including the Dangote Refinery, in a bid to reduce dependence on imported fuel.
But in practice, negotiations between both sides continue to follow a “willing buyer, willing seller” model, often leading to disagreements that stall actual deliveries.
Month-by-month breakdown
A closer look at the data reveals a pattern of underperformance:
- January:6 million barrels allocated; 25.3 million offered; only 9.2 million delivered
- February:5 million allocated; 19.8 million offered; 9.1 million delivered
- March:8 million allocated; 23.6 million offered; 10.1 million delivered
While March showed a slight improvement in deliveries, it still fell well short of both allocated and offered volumes.
The persistent supply gap is raising fresh concerns about Nigeria’s ability to fully utilize its growing refining capacity.
Analysts say inconsistent crude supply combined with pricing disputes is limiting output at domestic refineries and slowing progress toward energy self-sufficiency.
For major facilities like the Dangote Refinery, reliable access to crude remains critical to scaling operations and stabilizing fuel supply within the country.
A reform under pressure
The latest figures highlight the ongoing challenges facing reforms introduced under the Petroleum Industry Act, which was expected to streamline operations and improve domestic crude availability.
Instead, the Q1 data suggests that structural issues particularly around pricing and commercial alignment continue to undermine the policy’s effectiveness.
