Oil producers operating in Nigeria offered approximately 58.8 million barrels of crude oil to domestic refineries in the second quarter of 2026, exceeding the 55.1 million barrels allocated under the Domestic Crude Supply Obligation framework, according to new data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The figures indicate a growing effort by upstream operators to support local refining operations as Nigeria expands domestic refining capacity through the Dangote Petroleum Refinery and several modular refinery projects.
Details contained in the NUPRC’s latest report on the implementation of the Domestic Crude Supply Obligation showed that producers supplied volumes above official allocations by about 3.7 million barrels during the quarter.
The commission, however, noted that final data on the actual crude volumes delivered and processed into refined petroleum products would only be confirmed after the May 2026 Domestic Crude Request Review and Production Curtailment Management meetings.
According to the report, “Allocated: 55.1M BBLS | Offered: 58.8M BBLS,” while updates on supplied volumes and conversion efficiency are still being reconciled.
The latest development comes amid continued concerns over crude availability for domestic refiners, despite Nigeria’s status as Africa’s largest crude oil producer.
Industry stakeholders have repeatedly raised issues surrounding pricing structures, crude grade compatibility, and the “willing buyer, willing seller” arrangement, which leaves crude transactions subject to commercial negotiations between refiners and producers.
The regulatory commission had previously linked supply gaps within the domestic refining market to disagreements over pricing and the inability of some refiners to secure commercially competitive supply terms.
Speaking on the situation, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, said the increasing reliance of the Dangote refinery on imported crude is largely influenced by economics and operational requirements.
According to him, most Nigerian producers market Brent-linked crude grades at premium prices, while the refinery often finds imported West Texas Intermediate crude more commercially suitable for its refining configuration.
He explained that the pricing structure for locally produced crude places domestic refiners at a disadvantage when compared to international sourcing alternatives, adding that the sector requires a more flexible pricing framework capable of supporting local refining competitiveness.
Industry sources also disclosed that discussions have commenced among regulators, crude producers, and refinery operators to address concerns relating to pricing, crude availability, and commercial supply terms.
A stakeholder meeting involving the NUPRC, producers, and refinery operators is expected before the end of May as part of efforts to improve crude supply arrangements for local refiners.
According to a source familiar with the discussions, several refiners have complained that existing commercial terms remain difficult to meet and continue to affect their operational competitiveness.
The source noted that some modular refineries, including Waltersmith Refinery and Aradel Holdings, operate under relatively stable supply arrangements because they source crude directly from affiliated oil assets.
The official added that the facilities each process about 2,000 barrels per day from their own fields, giving them a level of supply certainty not available to several independent refiners that depend on third-party producers.
Further analysis of NUPRC data showed that crude allocations and offered volumes in the second quarter were lower than figures recorded in the first quarter of 2026.
In the first quarter, about 61.9 million barrels were allocated to domestic refiners, while producers offered approximately 68.7 million barrels under the Domestic Crude Supply Obligation framework.
Despite the decline in second-quarter allocations, producers still supplied volumes above the official quota, reflecting continued pressure from regulators and increasing crude demand from local refining facilities.
The Domestic Crude Supply Obligation was introduced under the Petroleum Industry Act to ensure local refineries receive adequate feedstock before crude exports are prioritised.
Under the framework, the NUPRC is responsible for monitoring compliance by upstream operators, while refiners periodically submit crude requirements through a structured allocation process.
The policy gained renewed attention following repeated complaints from domestic refiners over feedstock shortages, with the Dangote refinery at different times raising concerns about difficulties in sourcing sufficient local crude supply.
The Federal Government has consistently maintained that expanding domestic refining remains central to Nigeria’s energy security strategy and its broader plan to reduce dependence on imported petroleum products.
Industry analysts believe sustained compliance with the Domestic Crude Supply Obligation framework could improve refinery utilisation, reduce pressure on foreign exchange demand, and strengthen value addition within Nigeria’s oil and gas sector.