In a bold move to enhance domestic refining capacity, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced a substantial allocation of crude oil to local refineries for the first half of 2025. The total crude requirement for local refineries has been pegged at 123.48 million barrels, with the Dangote Refinery securing the largest share of the allocation.
This monumental decision underscores Nigeria’s commitment to bolstering its refining capacity, following a series of policy adjustments aimed at reducing dependence on imported refined petroleum products. The NUPRC’s Domestic Crude Oil Requirement and Crude Oil Production Forecast for the first half of 2025, released last week, revealed the specifics of how the country intends to balance domestic supply and refining needs over the next six months.
Dangote Refinery at the Forefront
According to the NUPRC’s forecast, the Dangote Refinery will receive a lion’s share of the allocation, with an estimated 99.55 million barrels of crude set to be delivered to the facility. This equates to a daily crude oil requirement of 550,000 barrels, or approximately 17 million barrels per month.
The Dangote Refinery, owned by billionaire industrialist Aliko Dangote, is the largest of its kind in Africa, with a refining capacity of 650,000 barrels per day. The refinery, which is set to begin operations in 2024, is expected to play a key role in transforming Nigeria’s refining sector. The massive crude allocation to Dangote highlights the government’s trust in the refinery’s ability to process and produce refined petroleum products that can meet the growing demand in Nigeria.
A senior official from the NUPRC, who spoke on condition of anonymity, emphasized the significance of this allocation: “The Dangote Refinery is poised to change the dynamics of Nigeria’s oil and gas industry. By giving the refinery this allocation, we are prioritizing the country’s push toward refining self-sufficiency. The government is fully backing this initiative, and we expect to see significant results.”
Other Refineries Receive Critical Allocations
While Dangote’s refinery stands out with the largest allocation, other refineries also stand to benefit from the country’s renewed focus on local refining. The Warri Refinery, one of Nigeria’s oldest operational refineries, will receive an estimated 13.59 million barrels of crude, with a daily requirement of 75,000 barrels. In a similar vein, the Port Harcourt Refinery will get 2.87 million barrels for the first half of the year, while the Kaduna Refinery’s estimated requirement is pegged at 3.96 million barrels.
These allocations are part of a broader strategy to ensure that Nigeria’s underutilized refineries remain operational, helping to address the country’s persistent fuel shortages and supply disruptions.
The NUPRC’s projections include other smaller but vital refineries such as the Waltersmith Refinery and the Edo Refinery and Petrochemical Company, both of which will receive smaller allocations of crude. The intention is to keep these refineries running efficiently, contributing to local production while reducing reliance on imported refined products.
“The goal is to create a balance. While Dangote receives a significant share due to its larger capacity, it is essential that smaller refineries are supported as well. They play a critical role in ensuring that all regions of Nigeria have access to refined products,” said the NUPRC official.
NUPRC’s Ambitious Production Targets
To meet these lofty goals, the NUPRC has set an ambitious daily crude oil production target of over 2 million barrels per day for the first half of 2025. This target aligns with Nigeria’s “Project 1 Million Barrels” initiative, launched in October 2024, which aims to ramp up production through strategic collaborations with local and international oil companies.
This increased production is critical to meeting both domestic refining requirements and export obligations. As of 2023, Nigeria’s average crude oil production was hovering around 1.5 million barrels per day, and the projected increase would represent a significant leap forward in the country’s oil output.
“We are confident that with the support of upstream operators and key stakeholders in the oil and gas sector, we will achieve the 2 million barrels per day target,” the NUPRC’s spokesperson said. “This would allow us to not only meet domestic refining needs but also support Nigeria’s role as a leading oil exporter.”
Leveraging Local Refining Capacity
The NUPRC’s decision is also a strategic step to utilize Nigeria’s domestic refining capacity more effectively. Currently, the country imports a significant portion of its refined petroleum products, despite being one of the world’s largest oil producers. The lack of functional refineries and the frequent downtime of existing ones have hindered efforts to ensure energy security and stability in domestic fuel supply.
By leveraging local refineries and securing a steady crude supply, the NUPRC hopes to mitigate some of these challenges. The NUPRC official remarked, “The government’s goal is clear: to create a self-sufficient petroleum industry. If local refineries are operating at full capacity, Nigeria will no longer be vulnerable to fuel importation challenges or price fluctuations.”
A Path Toward Energy Security
The allocations are also seen as part of Nigeria’s broader energy security strategy. With local refineries set to process crude into refined products, the country could gradually phase out the need for imported fuel, which often strains the national economy. In addition, the move could pave the way for job creation, technology transfer, and infrastructure development, all of which are critical to achieving long-term energy security.