Nigeria exports 82% of crude as local refineries starve

Amid cries of crude shortage by local refineries in Nigeria, the country exported 82 per cent of its crude oil in the first quarter of 2025,reports.

According to a report published by the Nigerian Upstream Petroleum Regulatory Commission, only 18 per cent of the crude was made available to local refineries.

Nigeria has the Dangote Petroleum Refinery, one of the largest refining complexes in the world, with 650,000 barrels-per-day nameplate capacity. The Federal Government owns the Port Harcourt, Warri, and Kaduna refineries, while some private players operate different modular refineries.

Aside from the state-owned facilities, Dangote and other modular refineries in the country have repeatedly complained of low crude supply, hindering their capacity to produce enough fuel for the country.

According to the report by the NUPRC, an average of 1.57 million barrels of crude oil was lifted in the first quarter of the year. Out of this, 1.29 million barrels per day were sold in foreign countries, while 280,000 bpd were allocated to local refineries.

The NUPRC said the 18 per cent allocated to domestic refineries underscored ongoing efforts to enhance local refining capacity and reduce import dependency, but the Dangote refinery said it was increasingly relying on the United States for crude supply.

“Total lifting stood at 1.57 mbpd, with export sales dominating at 82 per cent, reinforcing Nigeria’s position as a key supplier in international markets. Meanwhile, 18 per cent of the lifted volume was allocated to domestic refinery supply, underscoring ongoing efforts to enhance local refining capacity and reduce import dependency,” the report stated.

The commission acknowledged that refinery supply constituted a smaller portion, saying, however, that the 18 per cent supplied to local refineries ensured consistent energy availability. It promised that efforts to strengthen Nigeria’s refining capacity would be key factors influencing the industry’s trajectory in the future.

“Although refinery supply constitutes a smaller portion, it ensures consistent domestic energy availability. Moving forward, market trends, global energy policies and efforts to strengthen Nigeria’s refining capacity will be key factors influencing the industry’s trajectory,” it was stated.

In the period under review, the regulator disclosed that total crude oil and condensate production for 2025 averaged 1.68 mbpd, stating that this reflected sustained upstream operations.

A breakdown of the production mix revealed that crude oil accounted for 87 per cent, while condensate contributed 13 per cent. The commission likened this to maintaining historical production trends.

The commission disclosed that the balance between production and lifting reflected a well-managed supply chain, even with a significant share of the output directed toward international markets.

“The balance between production and lifting reflects a well-managed supply chain, with a significant share of output directed toward international markets,” it was added.

Recently, the President of the Dangote Group, Aliko Dangote, said his 650,000-barrel capacity refinery was “increasingly” relying on the United States for crude oil.

This came as findings showed that the refinery was projected to import a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months, amid ongoing allocations under the Federal Government’s naira-for-crude policy.

Dangote informed the Technical Committee of the One-Stop Shop for the sale of crude and refined products in naira initiative that the refinery was still battling crude shortages, which had led it to resort to imports from the United States.

Dangote stated this when the Coordinator of the OSS Technical Committee, Mrs Maureen Ogbonna, led a delegation to the refinery, which she described as a breath of fresh air, impacting virtually every sector of the economy.

He noted that “due to a shortage of domestic crude oil, the refinery has increasingly relied on imports from the United States to meet its needs in recent months.”

recalls that the refinery has been importing more cargoes of WTI in its bid to ramp up production. So far this year, US crude has accounted for a third of the purchases of the Dangote refinery, according to vessel-tracking data compiled by Bloomberg. A large part of the American crude feeding Nigeria’s refinery is the WTI Midland grade, the data showed.

Similarly, crude oil refiners in Nigeria cried out recently over their inability to access crude oil locally for their refineries, saying oil producers prefer selling crude to international traders in dollars.

The Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria, Eche Idoko, said in a statement on Monday that Nigeria’s transition to a more robust and self-reliant petroleum refining sector had been fraught with contradictions and policy ambiguities, despite the ambitious provisions of the Petroleum Industry Act 2021.

According to him, the government had also failed to implement the Domestic Crude Supply Obligation and the Domestic Crude Refining Requirement, which aim to ensure sufficient crude supply to indigenous refineries.

Idoko regretted that the ideal of local refining self-sufficiency remained elusive, caught in a web of conflicting economic interests, policy ambiguities, and what he called a flawed market logic centred on the ‘willing buyer, willing seller’ principle.

“Upstream producers prefer to sell to international buyers who pay dollar-denominated prices, while local refiners, constrained by domestic currency fluctuations and access to forex, often cannot compete.

“This market liberalisation paradoxically undermines the very goal of domestic refining self-sufficiency, as local refiners may be priced out of access to the crude they are legally entitled to receive,” Idoko stated.

Idoko stressed that although the DCSO and DCRR theoretically ensured supply security for local refineries, enforcement remained weak.

“For instance, under the current DCSO framework, approximately 385,000 barrels per day were earmarked for domestic supply to the Dangote refinery. Yet, actual deliveries have fallen drastically short of the target: only four cargoes were delivered in February 2025 and two in March, amounting to roughly 950,000 barrels, or 61,290 bpd — just 16 per cent of the target,” he disclosed.

The report by the NUPRC appears to have buttressed Idoko’s comment that oil producers preferred to export the commodity instead of following the domestic crude supply obligation.