Pricing Disputes Disrupt Nigerian Crude Supply

Nigerian crude oil producers delivered less than half of the allocated volumes to local refineries in Q1 2026 due to ongoing pricing disputes. With allocated volumes at 61.9 million barrels and actual supply at 28.5 million barrels, challenges persist despite the Petroleum Industry Act's efforts to boost local refining.

Nigerian crude ​oil producers supplied local refineries ​with less than half of the allocated volumes under the country's domestic crude supply rules in the first quarter of 2026, according to data from the Nigerian Upstream Petroleum Regulatory Commission. The shortfall is largely attributed to ongoing pricing disputes.

During the quarter, 61.9 million barrels of crude were allocated to domestic refineries under the Domestic Crude Supply Obligation, with producers offering 68.7 million barrels. However, the actual supply amounted to only 28.5 million barrels, equivalent to 46% of allocated volumes and 41% of offered volumes.

The figures indicate Nigeria's struggle to increase local refining capacity and decrease reliance on imported fuels, despite reforms under the Petroleum Industry Act. Pricing differences between producers and refiners continue to cause discrepancies, as transactions are based on a 'willing buyer, willing seller' approach. The issue has raised concerns at the Dangote refinery, impacting output and Nigeria’s potential to add more value to its oil production.