Nigerian Refining Industry Faces Crude Supply Crunch

Nigeria's crude supply is facing a significant crunch as domestic refineries demand more oil. According to Mr. Adegbite Falade, Chairman of the Independent Petroleum Producers Group (IPPG), Nigeria's refining industry could soon face a crude supply squeeze due to increasing demand from local refiners.

The current production level of 1.68 million barrels per day is not enough to meet the projected refinery demand of over 1.5 million bpd, leaving a narrow margin for crude exports and other requirements. Falade warned that Nigeria cannot sustain its refining ambitions without significantly increasing crude production.

Nigeria has sufficient hydrocarbon resources, with NUPRC's January 2026 reserves position showing 37.01 billion barrels of crude oil and condensate reserves and 215.19 trillion cubic feet of gas reserves. However, the challenge lies in converting these reserves into production and secure supply.

Falade called for greater exploration, faster field development, marginal-field growth, and improved access to capital to increase production. He also emphasized the need for a transparent and competitive domestic crude market capable of aggregating producers' volumes and facilitating grade blending and swaps.