Nigeria Warns of Crude Supply Shortfall for Expanding Refining Capacity
Nigeria's ambitious plans to boost domestic crude oil refining capacity face significant hurdles, including insufficient crude supply and high feedstock costs, according to industry stakeholders. At the third Nigeria Oil Refining Summit (NORS 2026) in Lagos, the Crude Oil Refinery-Owners Association of Nigeria (CORAN) and the Independent Petroleum Producers Group (IPPG) emphasized the need for urgent measures to align crude production with expanding refining capabilities.
CORAN chairman Mr. Momoh Oyarekhua highlighted the paradox of Nigeria's abundant crude reserves coexisting with domestic refineries struggling to secure feedstock at commercially viable prices. He proposed institutionalizing the naira-for-crude policy, creating a domestic crude pricing template, and enforcing the Domestic Crude Supply Obligation (DCSO) under the Petroleum Industry Act. Oyarekhua also suggested crude swaps and proximity-based supply arrangements to streamline logistics.
IPPG chairman Mr. Adegbite Falade warned that Nigeria's refining capacity expansion could soon exceed crude production, with domestic refineries potentially requiring over 1.5 million barrels per day. This demand could strain Nigeria's current liquids production of about 1.68 million barrels per day as of August 2026, leaving minimal room for exports. Falade called for increased investment in exploration, field development, and policies to boost upstream production.
Both groups stressed the need to connect the upstream sector with downstream refining capacity to ensure sustainable operations. CORAN also called for a Refinery Development Financing Framework to support new refineries and capacity expansion. The success of Nigeria's refining ambitions hinges on converting reserves into production and ensuring reliable crude supply to domestic refineries.