The Nigerian National Petroleum Company Limited (NNPCL) has reported that over 40.2 million barrels of crude oil made available by international and independent oil producers in Nigeria were not taken by Dangote Refinery and other local refineries. This shortfall occurred in the first quarter of the year, according to data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
NUPRC Data on Crude Allocation
The NUPRC, in a statement signed by its Head of Media and Corporate Communication, Eniola Akinkuotu, said that while the commission compelled an allocation of 61.9 million barrels through the provisions of the Petroleum Industry Act (PIA), producers collectively offered a higher volume of 68.7 million barrels. However, the conversion rate stalled at 28.5 million barrels, translating to a supply of about 36 percent as of the end of the first quarter in 2026.
Akinkuotu attributed the shortfall between volumes offered and actual deliveries primarily to pricing gaps between producers and domestic refiners. He emphasized that the current framework operates on a 'willing buyer, willing seller' basis, which continues to shape transaction outcomes. He also noted that the regulator remains committed to achieving the government's objective of energy sufficiency.
CRMI Warns of Oil Market Risks
Meanwhile, the Chartered Risk Management Institute of Nigeria (CRMI) has warned that Nigeria may face significant oil market risks following the decision of the United Arab Emirates (UAE) to exit the Organisation of the Petroleum Exporting Countries (OPEC). In a policy advisory issued yesterday, the institute said the development could trigger global oil market volatility, weaken supply coordination among producing nations, and heighten geopolitical tensions, with direct implications for Nigeria's economy.
The advisory, signed by CRMI Registrar and Chief Executive Officer Victor Olannye, described the UAE's exit as a 'landmark shift' in global oil governance capable of disrupting long-standing production alliances. According to Olannye, key risks include a potential breakdown in OPEC cohesion, increased oil price volatility, energy supply chain disruptions, macroeconomic uncertainty, and the possibility of a contagion effect, with other member states considering similar exits.
The UAE announced last month that it would quit OPEC and OPEC+ groups of major oil-producing nations in May after nearly 60 years of membership. The Emirates said its decision would help it meet growing global energy demand in the long term after recent investments to boost its production capacity. While noting that Nigeria could benefit from increased production flexibility and potential expansion in market share, the institute cautioned that such gains might be offset by exposure to unstable oil prices, reduced protection from coordinated supply management, and heightened global competition.
Federal Government Engages Chinese Firm for Refineries
The Federal Government's latest move to engage a Chinese firm to complete outstanding works and oversee the operations and maintenance of the Port Harcourt and Warri refineries has split opinion among energy experts and industry stakeholders. While some analysts view the Chinese deal as a pragmatic step to revive long-idle assets and boost domestic refining capacity, others argue it risks deepening a cycle of waste, insisting the ageing facilities should be scrapped and replaced with new, modern refineries.
The controversy comes amid concerns over transparency and value for money, especially following reports that the refineries were shut down barely months after gulping about N3.6 trillion for rehabilitation. A prominent energy economist, Prof Adeola Adenikinju, called for full disclosure of the Memorandum of Understanding (MoU), stressing that the public deserves clarity on the scope and structure of the agreement. Despite the concerns, the economist emphasized the strategic importance of functional refineries, noting that local processing of crude would significantly enhance value addition, create jobs, reduce poverty, and strengthen Nigeria's energy security.
However, policy analyst Blessing Wikina dismissed the renewed investment in rehabilitation as wasteful, arguing that repeated turnaround maintenance efforts failed to deliver results. A professor of Microbial Corrosion and Environment Studies, Akpofure Rim-Rukeh, questioned what the Chinese would do differently. The immediate past Vice Chancellor of Federal University of Petroleum Resources (FUPRE), Effurun, Delta State, said the Federal Government had not been transparent on what is happening at the refineries and that everything had been hidden from Nigerians. He added that until the history of the problem of the refineries is disclosed, only then can solutions be proffered.
For the Chairman of Warri Refinery Support Staff Association, Dafe Ighomitedo, the news that an MoU had been signed by NNPC Management with two Chinese companies (Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd), acting as Technical Equity Partners (TEP) for the complete Rehabilitation, Restart and Expansion of WRPC and PHRC, came to the Support Staff of WRPC with great excitement, and a fear of uncertainty as to their fate in this new partnership between Nigeria and China.
