Massive oil shipments continue despite local supply gaps, forcing Africa’s largest refinery to rely on costly imports….
Nigeria exported more than 55 million barrels of crude oil in the first two months of 2026, even as domestic refineries most notably the Dangote Petroleum Refinery struggled to secure adequate feedstock.
Latest figures from the Central Bank of Nigeria show that 31.31 million barrels were exported in January, followed by 24.08 million barrels in February. During the same period, total crude production stood at 81.94 million barrels, leaving just 26.55 million barrels available for local refining.
Production itself showed signs of decline. Output averaged 1.46 million barrels per day in January, dropping to 1.31 million barrels per day in February. Export volumes also fell slightly, from 1.01 million barrels per day to 0.86 million barrels per day.
Despite being Africa’s largest oil producer, Nigeria continues to export a significant share of its crude while local refining capacity remains underutilised. This imbalance has become more pronounced as the 650,000-barrel-per-day Dangote refinery grapples with persistent supply shortages under the naira-for-crude arrangement.
Industry data reveal the scale of the gap. The refinery requires roughly 19.77 million barrels of crude each month to operate at full capacity. However, between October 2025 and mid-March 2026, it received only 29.21 million barrels far below the estimated 108.74 million barrels needed over that period. That translates to a supply performance of just 26.9 percent.
A month-by-month breakdown paints a clearer picture of the shortfall:
- October: 4.55 million barrels
- November: 6.45 million barrels
- December: 4.30 million barrels
- January: 5.65 million barrels
- February: 4.66 million barrels
- March (first half): 3.6 million barrels
Even recent improvements have done little to close the gap. The Nigerian National Petroleum Company Limited (NNPC) increased supply to the refinery from five to 10 cargoes in March, but that still falls short of the facility’s requirements.
The situation has forced the refinery to turn to international markets, where crude is purchased at global prices often with additional premiums. This has contributed to higher production costs and, ultimately, rising fuel prices.
At one point, petrol prices climbed above ₦1,300 per litre before easing to around ₦1,250. The refinery attributed the increases to the high cost of crude and the failure of local producers to meet supply obligations outlined in the Petroleum Industry Act.
According to the company, it has been receiving only about five cargoes per month from the national oil firm, compared to the 13 cargoes needed to sustain operations at scale. Even those deliveries, it said, are priced at international market rates despite being paid for in naira.
Officials within the NNPC acknowledge the supply challenges but insist they are temporary. Sources say the company has been tapping into its global trading network to secure third-party crude for the refinery at competitive prices.
They also point to legacy issues, including previously “front-sold” crude volumes, which have constrained current availability and created distortions in supply.
Meanwhile, calls are growing louder within the industry for a rethink of crude allocation priorities. Stakeholders argue that meeting domestic refining needs should take precedence over exports, especially given the country’s push for energy security and reduced dependence on imported fuel.
The debate is likely to intensify as production gradually improves. For refiners, the message is clear: consistent access to crude is the difference between profitability and stagnation.
As one industry representative put it, the refining business remains highly viable but only if the feedstock flows.
