NUPRC: Refineries take ‘36–46%’ of crude available amid

Nigeria's domestic refining sector faces a deepening supply crisis as refineries collected just 28.5 million barrels of crude oil in the first quarter of 2026—a stark 54% shortfall against the 61.9 million barrels allocated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). This gap reveals systemic inefficiencies in crude allocation, persistent pricing disputes, and operational constraints that risk derailing the nation's energy independence agenda.

The crude supply underperformance is particularly alarming given Nigeria's historical reliance on imported petroleum products. The country has invested billions in rehabilitating the Port Harcourt, Warri, and Dangote refineries to reduce fuel imports and stabilize local prices. Yet Q1 2026 data demonstrates that even with expanded refining capacity, the pipeline remains fragile.

## Why Did Refineries Receive Only 36–46% of Allocated Crude?

The NUPRC allocation system assigns crude volumes based on refinery nameplate capacity and projected demand. However, actual offtake fell dramatically short. Three factors explain the gap: first, **pricing disputes** between the NUPRC and crude producers over benchmark prices and lifting terms created supply friction; second, **export competition** from international buyers offering higher prices incentivized producers to divert barrels away from domestic refineries; and third, **refinery throughput constraints**—maintenance schedules and technical bottlenecks at older facilities limited their ability to process higher volumes, reducing demand signals to upstream operators.

The Dangote Refinery, which came online in late 2023 with 650,000 barrels-per-day capacity, has absorbed a growing share of allocations but still operates below nameplate due to crude quality variability and product offtake logistics challenges.

## What Are the Market Implications for Fuel Prices?

When domestic refineries underutilize crude allocation, Nigeria reverts to fuel imports—a costly outcome that pressures the naira and inflates pump prices. Q1 2026 shortfalls likely forced additional imports of gasoline and diesel, increasing foreign exchange outflows and potentially widening the current account deficit. Investors tracking Nigeria's inflation and exchange rate dynamics should monitor refinery crude intake as a leading indicator of fuel supply resilience.

The pricing dispute mechanism also signals structural tension between upstream operators and the regulator. Producers claim NUPRC benchmarks undervalue crude, discouraging domestic sales; refiners argue high crude costs prevent competitiveness. Until a transparent, market-linked pricing framework emerges, this standoff will persist.

## How Can Nigeria Close the Supply Gap?

The path forward requires three interventions: (1) **automated crude pricing** pegged to global benchmarks with monthly adjustments to remove arbitrage incentives; (2) **refinery maintenance coordination**—stagger turnarounds to maintain 85%+ utilization rates; and (3) **offtake agreements** that lock refineries into long-term crude purchases, stabilizing producer revenue and reducing export speculation.

Without action, Nigeria risks remaining a crude exporter and fuel importer simultaneously—a paradox that erodes government revenue and household purchasing power. The NUPRC and petroleum ministry must resolve pricing disputes by Q2 2026 to prevent further deterioration.

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