Domestic crude must be available and commercially viable – Dangote Refinery

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has confirmed that 53.7 million barrels of crude oil and condensate were supplied to local refiners during the second quarter of 2026. This achievement marks a performance rate of 97.4 per cent against the Domestic Crude Supply Obligation (DCSO) targets set for the period. The figures were released in a detailed quarterly enforcement report published by the commission on Monday. The DCSO is mandated under Section 109 of the Petroleum Industry Act (PIA) 2021, which aims to ensure that domestic refineries receive adequate crude oil supplies to meet national energy demands and reduce dependence on imports. The process involves regular meetings between the NUPRC, crude oil producers, and licensed domestic refineries. These discussions lead to the allocation of specific crude oil and condensate volumes to producers, who then offer these quantities to local refineries. However, the system functions on a “willing buyer, willing seller” model, meaning the final amount delivered depends on mutual agreement between parties. In April 2026, the NUPRC allocated 18,127,638 barrels to producers. Producers subsequently offered 19,312,476 barrels to local refiners, and the final delivery reached 20,879,381 barrels, representing a 114.9 per cent performance against the allocated volume. In contrast, the following month saw a drop in performance. For May, the NUPRC allocated 18,778,392 barrels, but producers offered 23,187,893 barrels to refiners. Despite this, only 14,228,865 barrels were actually supplied, resulting in a 75.8 per cent compliance rate. June brought a marked improvement. The NUPRC allocated 18,172,638 barrels to producers, who offered 26,835,119 barrels to refiners. By the end of the month, 18,606,026 barrels had been supplied, achieving a 102.4 per cent performance. The commission attributed the improved results to rising domestic oil production and the establishment of long-term crude supply contracts backed by bankable Sales and Purchase Agreements between producers and domestic refineries. Earlier in the year, the situation appeared less favorable. According to the NUPRC's earlier reports, Nigeria’s domestic refineries received just 28.5 million barrels of crude oil in the first quarter of 2026, even though producers had offered 68.7 million barrels. Between January and March, 61.9 million barrels were allocated to refineries, yet only 28.5 million barrels were actually supplied. This resulted in a supply conversion rate ranging between 36 and 46 per cent, highlighting the ongoing challenge of aligning supply with demand within the country’s refining sector. The Dangote Refinery, one of the largest in Africa, required 63 million barrels of crude oil during the second quarter. Producers offered 68.1 million barrels to the refinery, accounting for 98 per cent of all crude volumes offered to local refiners during the period. However, the refinery accepted only 52.6 million barrels, representing 78 per cent of the volume offered to it. Despite these challenges, the NUPRC reiterated its dedication to fulfilling the federal government’s goal of achieving energy self-sufficiency. The commission emphasized its intent to continue using the mechanisms outlined in the PIA 2021 to maintain current levels of crude oil production and reinforce adherence to the domestic crude supply obligation. The agency expressed confidence that sustained collaboration among stakeholders would help bridge the existing gaps in supply and demand.