Refiners Battle Crude Shortage as Nigeria Exports 306m Barrels
Nigeria’s local refineries are grappling with a severe shortage of crude oil feedstock following the export of about 306 million barrels of crude, raising concerns over domestic refining capacity and energy security.
Industry data indicate that the large volume of exports has significantly reduced the availability of crude for local refineries, despite government policies aimed at encouraging domestic processing and reducing dependence on imported petroleum products.
Refinery operators say limited access to crude has constrained operations, forcing some plants to operate below capacity or suspend production altogether. This has occurred even as Nigeria seeks to ramp up local refining through the rehabilitation of state-owned refineries and the commencement of operations at privately owned facilities.
According to industry sources, crude oil producers often prioritise export contracts due to more attractive pricing, dollar-denominated revenues, and existing long-term supply agreements with international buyers. Domestic refiners, by contrast, reportedly face pricing disputes, logistical challenges, and delays in securing supply.
Analysts note that while crude exports remain a major source of foreign exchange earnings for Nigeria, the imbalance between exports and domestic supply continues to undermine efforts to achieve fuel self-sufficiency and stabilise the downstream sector.
The situation has also renewed calls for clearer enforcement of the Domestic Crude Supply Obligation (DCSO), a policy designed to ensure that a portion of Nigeria’s crude production is reserved for local refining.
Energy experts warn that unless structural issues around pricing, infrastructure, and regulatory enforcement are addressed, crude shortages could persist, limiting the benefits of increased refining capacity and prolonging reliance on imported fuel.
Nigeria, Africa’s largest oil producer, has long struggled with the paradox of exporting crude oil while importing refined petroleum products, a challenge authorities say they are working to resolve through sector reforms.
