The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has said it will enter into negotiations with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC),to resolve teething issues related crude oil supply shortages to local refineries.
The NMDPRA, says enhanced crude supply to local refineries has become important as Nigeria now boosts of about 1.125 million barrels a day (bpd) of installed refining capacity, led by Dangote’s 700,000-bpd refinery, which has helped Nigeria become a net exporter of refined products.
The Agency hinted of Governments intention to refine all of its crude domestically, as the country targets production of 3 million barrels a day in the coming years.
Nigeria still faces major structural constraints, including crude supply shortages, underperforming state-owned refineries and concerns over excessive dependence on Dangote.
The Director General (DG) of the Authority Rabiu Umar, who dropped the hint in Lagos at the 49th annual conference of the Society of Petroleum Engineers (SPE) Nigeria Council, explained that that the federal government wants to end the pattern where much of its produced crude are exported and refined products on the other hand imported.
“Every molecule of our three million barrels per day that we hope to achieve in the coming years will be refined locally,” Umar said.
To achieve that goal, the NMDPRA is working with the NUPRC to enforce domestic crude supply obligations. Nigerian petroleum law requires producers to supply part of their crude output to domestic refineries.
Umar called the requirement “really, really important” for supporting the expansion of Nigeria’s refining industry.
Nigeria now has 1.125 million barrels per day of installed refining capacity, according to the NMDPRA. The country reached that level for the first time in its history. Dangote Refinery provides the bulk of that capacity. The facility reached its 700,000-bpd nameplate capacity during tests in June.
The refinery has also helped Nigeria become a net exporter of refined petroleum products. Dangote supplies 80% of domestic demand while exporting products to West Africa and Europe, Nigeria Housing Market reported in May.
The Agency’s 3 million-bpd production target represents almost twice Nigeria’s current output.
The NUPRC estimated June production at about 1.73 million bpd. Nigeria must therefore first almost double crude production before it can refine all of its output domestically. That expansion will require several years of investment.
However, refineries operated by the Nigerian National Petroleum Company Limited (NNPCL) in Port Harcourt, Warri and Kaduna are operating below capacity.
The NNPCL acknowledged in November 2025 that the facilities cannot match Dangote’s fuel quality.
Dangote refinery is also planning expansion to 1.4 million bpd. However, concerns remain over the risks that a single dominant refiner could pose to the country’s fuel supply, as Agence Ecofin reported in May.
State-owned refineries remain part of the strategy. Their combined potential capacity exceeds 300,000 bpd. Yet the facilities have failed to reach their full potential despite more than $25 billion in public investment between 2003 and 2023.
The NNPC Ltd is now seeking private partners that will receive payment only when the refineries actually produce.
The approach contrasts with the previous model, which paid companies to rehabilitate the facilities regardless of their operating performance
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