Morganable business/Energy& industry
A major beneficiary of the improved supply performance is the Dangote Petroleum Refinery, which accounted for the bulk of crude volumes offered during the quarter
KaNo—
Crude oil deliveries to Nigeria’s domestic refineries surged by 88.4 per cent in the second quarter of 2026, as the Federal Government’s Domestic Crude Supply Obligation (DCSO) recorded a 97.4 per cent performance, according to new data released by the Nigerian Upstream Petroleum Regulatory Commission.
The commission disclosed that local refineries received 53.7 million barrels of crude oil and condensate between April and June, a sharp increase from the 28.5 million barrels delivered in the first quarter of the year.
The latest figure represents an increase of 25.2 million barrels, underscoring a significant turnaround in the implementation of the DCSO framework, which had struggled to translate supply commitments into actual deliveries earlier in the year.
In a statement issued on Monday by its Head of Media and Corporate Communications, Eniola Akinkuotu, the commission said the second-quarter performance reflected stronger enforcement and improved coordination among stakeholders in the oil and gas sector.
“The statistics show that DCSO is being actively administered and enforced by the NUPRC. Every month, the commission meets with stakeholders, including crude oil producers and local licensed refineries, after which producers are allocated specific volumes of crude oil and condensate to be offered to domestic refiners,” the statement read.
Despite the regulatory structure, the commission noted that the framework still operates on a “willing buyer, willing seller” basis in line with the provisions of the Petroleum Industry Act, meaning that actual deliveries ultimately depend on commercial agreements between producers and refiners.
A major beneficiary of the improved supply performance is the Dangote Petroleum Refinery, which accounted for the bulk of crude volumes offered during the quarter.
According to the data, producers offered 68.1 million barrels of crude oil to the refinery against its requirement of 63 million barrels over the three-month period.
However, the refinery accepted 52.6 million barrels, representing about 78 per cent of the volumes offered.
The 68.1 million barrels offered to the Dangote refinery accounted for approximately 98 per cent of all crude volumes offered to domestic refineries in the second quarter, highlighting its dominant position in Nigeria’s refining landscape.
While the volume accepted by the refinery fell short of what was offered, the figures still indicate a substantial increase in crude intake compared with the first quarter, when supply constraints and pricing disagreements limited deliveries.
69.3 Million Barrels Offered To Domestic Refineries
Overall, producers offered 69.3 million barrels of crude to domestic refineries during the second quarter, slightly higher than the 68.7 million barrels offered in the first quarter. However, the key difference was the improved conversion rate of these offers into actual supply.
In the first quarter, only about 41.5 per cent of the crude offered by producers was delivered to refineries.
By contrast, approximately 77.5 per cent of the crude offered in the second quarter was successfully supplied, representing an improvement of roughly 36 percentage points.
In the second quarter, deliveries reached 97.4 per cent of the 55.1 million barrels allocated, marking an increase of over 50 percentage points.
Interestingly, while performance improved, the total volume allocated under the DCSO declined slightly in the second quarter. The 55.1 million barrels allocated were about 6.8 million barrels, or 11 per cent, lower than the 61.9 million barrels allocated in the first quarter.
However, producers continued to exceed their allocated volumes by offering more crude than required, suggesting increased willingness to supply the domestic market.
Monthly Performance Shows Positive Outcomes
In April, producers exceeded expectations by supplying more crude than allocated. The commission allocated 18.13 million barrels for domestic refining, while producers offered 19.31 million barrels and eventually delivered 20.88 million barrels. This represents a performance level of 114.9 per cent, indicating that supply surpassed allocation.
May, however, recorded a dip in performance. Although producers were allocated 18.78 million barrels and offered 23.19 million barrels, actual deliveries dropped to 14.23 million barrels, translating to 75.8 per cent performance.
Performance rebounded in June, with deliveries once again exceeding allocations. The commission allocated 18.17 million barrels, while producers offered 26.84 million barrels. Actual supply reached 18.61 million barrels, representing 102.4 per cent performance.
The fluctuating monthly figures underscore the complexities of the DCSO framework, particularly in a market where pricing dynamics, logistics, and refinery demand all play critical roles.
It noted that the improved supply environment marked a departure from the challenges experienced in the first quarter, when significant gaps existed between allocated volumes, crude offered, and actual deliveries.
During that period, although 61.9 million barrels were allocated and 68.7 million barrels offered, only 28.5 million barrels were ultimately supplied, largely due to disagreements over pricing and other commercial terms.
The commission reiterated that the DCSO framework is designed to prioritise domestic refining while maintaining market-driven principles.
“The framework operates on a willing buyer, willing seller basis, which shapes eventual outcomes,” it stated, adding that continued engagement with stakeholders would be key to sustaining the progress recorded in the second quarter.
Improved Crude Supply Could Enhance Nigeria’s Refining Capacity
Industry analysts say the improved crude supply to domestic refineries could significantly enhance Nigeria’s refining capacity, reduce dependence on imported petroleum products, and strengthen energy security.
For the Dangote refinery, which has a nameplate capacity of about 700,000 barrels per day, consistent crude supply remains critical to achieving optimal utilisation levels and supporting the country’s broader economic objectives.
The second-quarter data suggest that while progress has been made, challenges remain, particularly in bridging the gap between crude offered and crude actually taken by refiners.
Nevertheless, the sharp increase in deliveries signals a positive shift in the domestic crude supply framework and raises expectations that Nigeria may be closer to achieving a more efficient and self-sustaining refining sector.
