By Adamu Ali
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that pricing disagreements between crude oil producers and domestic refiners significantly reduced supply to local refineries in the first quarter of 2026, leading to a shortfall of between 54 and 64 percent.
In a statement issued by its Head of Media and Corporate Communication, Eniola Akinkuotu, the Commission said that although 61.9 million barrels of crude oil were allocated to domestic refineries under the Domestic Crude Supply Obligation (DCSO), and producers made available 68.7 million barrels, only 28.5 million barrels were actually delivered.
The figures represent a supply conversion rate of between 36 and 46 percent, underscoring a significant gap between volumes offered and those eventually supplied.
According to the Commission, the persistent shortfall is largely driven by pricing mismatches under the current “willing buyer, willing seller” framework, which determines transactions between producers and refiners.
A breakdown of the data showed that in January, producers exceeded the DCSO allocation of 22.6 million barrels by offering 25.3 million barrels—an increase of 11.9 percent. However, only 9.2 million barrels were delivered to local refineries.
In February, allocations stood at 20.5 million barrels, while producers offered slightly less at 19.8 million barrels, falling short by 700,000 barrels. Actual deliveries declined further to 9.1 million barrels.
March recorded a marginal improvement, with deliveries rising to 10.1 million barrels.
During the same period, allocations were 18.8 million barrels, while producers offered a higher 23.6 million barrels—an excess of 25.5 percent.
Despite the improved offers in March, the Commission noted that actual deliveries remained constrained, reinforcing concerns that pricing misalignment continues to hinder adequate crude supply to domestic refineries.
The NUPRC reiterated its commitment to achieving national energy sufficiency, stating that it would continue to refine the DCSO framework to enhance transparency and efficiency, while ensuring local refineries receive sufficient crude supply.
The Commission added that it is leveraging provisions of the Petroleum Industry Act to sustain recent gains in crude oil production and strengthen compliance with domestic supply obligations.
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