Nigeria's Refining Ambitions Threatened by Crude Supply Shortages

Industry stakeholders have raised concerns that Nigeria's push to expand domestic refining capacity could be hampered by insufficient crude oil supply and high feedstock costs. 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 measures to align crude production with growing refining capabilities.

CORAN chairman Momoh Oyarekhua highlighted the paradox of Nigeria's abundant crude reserves coexisting with domestic refineries struggling to secure feedstock on commercially viable terms. He proposed the full institutionalization of the naira-for-crude policy and a domestic crude pricing template that considers factors like crude quality and evacuation expenses. CORAN also called for stronger enforcement of the Domestic Crude Supply Obligation (DCSO) under the Petroleum Industry Act.

IPPG chairman Adegbite Falade warned that Nigeria's refining capacity expansion could soon outstrip crude production, which stood at about 1.68 million barrels per day as of August 2026. He projected that domestic refineries could require more than 1.5 million barrels per day in the medium term, leaving limited room for exports and other commitments. Falade urged increased investment in exploration, field development, and policies to boost upstream production.

Both groups stressed the importance of connecting the upstream crude production sector with downstream refining capacity. They called for long-term financing frameworks, bankable commercial terms, and policies that ensure reliable crude supply to domestic refineries.