The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is working with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to address crude supply challenges affecting local refineries as Nigeria’s installed refining capacity rises to about 1.125 million barrels per day.
Speaking in Lagos at the 49th annual conference of the Society of Petroleum Engineers Nigeria Council, NMDPRA Director-General Rabiu Umar said the two regulators would engage in discussions aimed at resolving difficulties surrounding the supply of crude to domestic processors.
Umar said the Federal Government wants Nigeria to end the cycle of exporting crude oil while importing refined petroleum products. He explained that the government’s long-term goal is to process all crude produced in the country locally as production moves towards a target of three million barrels per day.
“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 support that ambition, the NMDPRA and NUPRC are expected to enforce domestic crude supply obligations requiring petroleum producers to make part of their output available to Nigerian refineries. Umar described the requirement as essential to sustaining the expansion of the country’s refining industry.
Nigeria’s installed refining capacity reached about 1.125 million barrels per day, with the Dangote Petroleum Refinery accounting for the largest share. The Lagos facility recently processed up to 700,000 barrels per day during testing, exceeding its official 650,000-bpd nameplate capacity. It has also helped Nigeria increase exports of refined petroleum products to markets in West Africa and Europe.
However, the country’s refining ambitions continue to face significant obstacles. Crude production remains below the level required to supply existing and proposed refineries, while the state-owned facilities in Port Harcourt, Warri and Kaduna are still operating below their potential.
The NMDPRA’s three-million-barrels-per-day production target is almost twice the country’s current output. The NUPRC estimated Nigeria’s June production at approximately 1.73 million barrels per day, meaning substantial investment in upstream development, security and infrastructure will be needed before the target can be reached.
The Dangote refinery is also preparing to expand its capacity to 1.4 million barrels per day, with the project expected to be completed within the next few years. While the planned expansion could significantly strengthen Nigeria’s position as a regional refining hub, it has also raised concerns about excessive reliance on a single dominant private refiner.
The Federal Government is therefore keeping the state-owned refineries within its wider energy strategy. Together, the Port Harcourt, Warri and Kaduna plants have potential capacity exceeding 300,000 barrels per day, but years of underperformance and heavy rehabilitation spending have limited their contribution.
NNPCL is now seeking private partners under a performance-based arrangement in which contractors would receive payment only when the refineries resume production. The model is intended to replace earlier rehabilitation agreements that paid contractors regardless of whether the facilities returned to sustained operation.
Ensuring reliable crude supply, restoring state-owned refineries and supporting new private-sector capacity will be critical to Nigeria’s goal of becoming self-sufficient in refined petroleum products.