By Sola Adebawo
Nigeria’s refining debate has turned to a more fundamental question: can the country reliably supply the crude its refineries need, and on what terms?
On 9 October, Finance Minister Taiwo Oyedele said Nigeria did not have enough freely available crude to meet the Dangote refinery’s full requirement of 700,000 barrels per day. His point was that national production is not the same as crude the government can freely allocate. Joint-venture and production-sharing entitlements, production costs and royalties all affect the volume available to the state.
That distinction matters. Oyedele was not saying Nigerian crude was unavailable for refiners to buy. The questions are how much crude is produced, who owns each portion, what is already committed, and whether local refiners can secure timely deliveries on workable commercial terms.
NUPRC’s Q2 2026 report complicates the picture. Producers offered Dangote Refinery 68.1 million barrels against a stated requirement of 63 million. The refinery accepted 52.6 million barrels. Separately, NUPRC reported that 53.7 million barrels of crude and condensate were supplied to all local refiners during the quarter, representing 97.4 per cent of allocated volumes.
The figures measure different things. The 97.4 per cent is performance against allocated volumes; it does not mean each refinery received all it requested. Dangote’s stated quarterly requirement works out to about 692,000 barrels per day, close to the refinery’s 700,000-barrel nameplate capacity. Its accepted supply averaged about 578,000 barrels per day over the quarter. That is an arithmetic comparison of NUPRC’s figures, not a measure of actual refinery throughput.
The data raise a question they do not answer: why did the refinery accept less than its stated requirement when producers had offered more? The figures cover April to June, not the current quarter, and do not say whether price, grade, timing, payment, operational planning or another factor shaped acceptance. They do not prove a continuing supply shortage. But they show why the issue cannot be reduced to whether Nigeria has oil in the ground.
Market evidence points to a mixed sourcing strategy. Reuters reported that Dangote had bought at least 16 million barrels of Nigerian crude for October arrival, equivalent to about 520,000 barrels per day. Its October supply programme also included two US crude cargoes. This indicates substantial local purchases alongside imported feedstock. It does not establish why the imports were needed or whether the local offers could have met the refinery’s full operational needs.
Nigeria’s legal framework recognises both domestic supply objectives and commercial realities. Section 109 of the Petroleum Industry Act provides for domestic crude supply obligations. NUPRC says the framework operates on a willing-buyer, willing-seller basis. An obligation to offer crude does not, by itself, settle the price, payment, delivery or grade terms needed to complete a transaction.
This is the coordination challenge behind Nigeria’s refining expansion. More local refining can reduce reliance on imported petroleum products and create export opportunities. But installed capacity alone does not deliver energy security. If refiners cannot secure suitable feedstock on reliable terms, they may source crude internationally, adjust throughput or compete with exporters for available barrels.
The policy response should not begin with the assumption that crude must be sold to refiners at a discount. That could shift costs to producers or the public, weaken export earnings or create another form of subsidy. Nor should refiners be left to navigate uncertain allocations and opaque contracting. Nigeria needs rules that make supply predictable while allowing producers to earn commercially viable returns.
There are practical steps. Nigeria needs to raise production, because sustained output growth creates more room for exports and local refining. NUPRC should publish regular data showing volumes allocated, offered, accepted and delivered, with enough explanation to clarify material gaps. Producers and refiners need bankable supply agreements, reliable payment arrangements and clear procedures for resolving disputes over pricing, quality and delivery. Where commercial confidentiality limits disclosure, the regulator can publish aggregated data without revealing contract-level details.
The trade-offs should be explicit. Diverting more crude to domestic refineries may support local processing, but it can reduce exports when global prices are high. Requiring refiners to buy at commercial prices protects the fiscal position, but exposes them to international crude prices and exchange-rate movements. Neither choice guarantees lower pump prices.
The measure of success should be more than the amount of refining capacity announced or installed. It should be whether Nigeria can produce crude sustainably, account transparently for ownership and allocation, and deliver feedstock under terms that support investment. The Q2 data leave a question worth answering: what happened between the barrels offered and the barrels accepted?
Until Nigeria can account clearly for those barrels, expanding refining capacity may reduce imports of finished products while leaving some refineries dependent on imported crude for part of their needs.
Sola Adebawo is an energy industry executive, strategic adviser and thought leader with 30 years of experience in the oil and gas industry, including senior leadership roles across Africa’s upstream petroleum sector. He is the Chief Executive Officer of Hyphen Partners Limited, a specialist advisory firm focused on policy and regulatory intelligence, market entry, stakeholder strategy, and executive and institutional positioning in complex, highly regulated industries. A former executive at Chevron and Heritage Energy, he is an author, scholar and ordained minister. His writing explores energy policy, political economy, corporate governance, strategic communication, leadership, the relationship between institutions and public life, and the forces shaping Africa’s development.
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