The development is significant for Nigeria’s refining ambitions as the country seeks to reduce its dependence on imported petroleum products by ensuring that domestic refineries have adequate crude feedstock
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has reported a boost in the implementation of the Domestic Crude Supply Obligation (DCSO), with the Dangote Refinery accounting for the overwhelming majority of the crude supplied to domestic refiners in the second half of 2026.
The DCSO is being enforced by the NUPRC under Section 109 of the Petroleum Industry Act (PIA), which requires oil producers to make crude available to domestic refineries.
According to data released by the Commission on Monday, all local refiners received 53.7 million barrels of crude oil and condensate in the quarter under review.
The NUPRC, however, said although the Dangote refinery required 63 million barrels during Q2, producers offered it 68.1 million barrels. The volume represented about 98 per cent of the total 69.3 million barrels offered to all domestic refiners during the quarter.
Despite the improved volume offered to the Refinery, the Commission noted that the Dangote refinery accepted only 52.6 million barrels, about 77 per cent of the crude offered to it and 10.4 million barrels below its stated requirement.
Its intake also represented about 98 per cent of the 53.7 million barrels eventually supplied to local refiners during the period.
The figures showed that producers were allocated 55.1 million barrels between April and June but offered 69.3 million barrels, exceeding their allocation by 14.2 million barrels, or 25.8 per cent.
Actual supplies, however, stood at 53.7 million barrels, leaving about 15.6 million barrels of the volumes offered unutilised. Supplies were also about 1.4 million barrels below the total volume allocated by the NUPRC.
According to the Commission, the DCSO framework is administered through monthly consultations involving crude oil producers and licensed domestic refineries, after which producers are allocated specific volumes of crude oil and condensate to offer to local refiners.
However, the eventual transactions operate under the PIA’s “willing buyer, willing seller” principle, meaning that volumes offered by producers do not necessarily translate into equivalent quantities purchased and received by refiners.
The quarterly figures also showed significant variations in performance across the three months. In April, producers were allocated 18.13 million barrels but offered 19.31 million barrels to local refiners. Actual supplies reached 20.88 million barrels, representing 114.9 per cent performance against their allocation.
In May, 18.78 million barrels were allocated and 23.19 million barrels offered, but only 14.23 million barrels were supplied, representing 75.8 per cent compliance. This resulted in a shortfall of about 4.55 million barrels against the month’s allocation.
Performance recovered in June, when producers were allocated 18.17 million barrels and offered 26.84 million barrels to refiners. Actual supplies stood at 18.61 million barrels, representing 102.4 per cent performance.
The monthly data showed that producers consistently offered more crude than their allocated volumes, but actual deliveries were influenced by the quantities refiners were willing or able to take under the commercial arrangements.
The NUPRC said the improvement in DCSO performance coincided with an increase in local oil production and the signing of long-term crude supply agreements supported by bankable Sales and Purchase Agreements (SPAs) between producers and domestic refiners.
The Commission said the Q2 results demonstrated that the DCSO was “actively administered and enforced”, adding that it remained committed to sustaining the recent gains.
It said it would continue leveraging the PIA framework to sustain improvements in crude oil production while enforcing the DCSO as part of efforts to achieve the Federal Government’s objective of energy sufficiency.
The development is significant for Nigeria’s refining ambitions as the country seeks to reduce its dependence on imported petroleum products by ensuring that domestic refineries have adequate crude feedstock.
SOURCE: channelstv.com
