Keypoints
- The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has released statistics on the enforcement of the Domestic Crude Supply Obligation (DCSO) for the first quarter of 2026.
- Actual supply to local refineries was 28.5 million barrels during the quarter, despite producers offering a higher volume of 68.7 million barrels.
- The supply conversion rate stood between 36% and 46% as of the end of March 2026.
- Shortfalls between volumes offered and actual deliveries are primarily attributed to pricing gaps between producers and domestic refiners.
- The NUPRC emphasized that the current framework operates on a “willing buyer, willing seller” basis under the Petroleum Industry Act (PIA).
Main Story
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has released official data regarding the Domestic Crude Supply Obligation (DCSO) for the first quarter of 2026.
The report indicates that while 61.9 million barrels of crude oil were allocated to domestic refineries during the quarter, and producers offered 68.7 million barrels, the actual volume supplied was 28.5 million barrels. This results in a supply conversion rate of 36-46 per cent for the period.
A monthly breakdown reveals that in January, the Commission mandated a supply of 22.6 million barrels.
Producers offered 25.3 million barrels, representing an 11.9 per cent increase over the mandate, yet 9.2 million barrels were ultimately delivered. In February, the Commission allocated 20.5 million barrels, while producers offered 19.8 million barrels. Actual supply for that month was 9.1 million barrels.
In March, deliveries saw a modest improvement to 10.1 million barrels. During this month, DCSO allocations were set at 18.8 million barrels, though producers offered a significantly higher volume of 23.6 million barrels, exceeding the allocation by 25.5 per cent.
The Commission stated that the gap between offered volumes and actual deliveries stems from pricing disagreements between producers and refiners, as the current framework relies on market-driven negotiations.
The Issues
- Pricing gaps between crude oil producers and domestic refiners remain the primary cause for the shortfall in actual deliveries.
- The supply conversion rate remains below 50% despite producers offering volumes that exceed the Commission’s mandated allocations.
- The “willing buyer, willing seller” framework continues to dictate transaction outcomes, potentially impacting the volume of crude reaching local plants.
What’s Being Said
- The Commission emphasized that the current framework operates on a “willing buyer, willing seller” basis.
- NUPRC reaffirmed its commitment to achieving the government’s objective of energy sufficiency.
- Eniola Akinkuotu, Head of Media and Corporate Communication, stated that the Commission aims to refine the DCSO methodology to enhance transparency and efficiency.
What’s Next
- The Commission intends to leverage the PIA 2021 framework to sustain gains in crude oil production.
- Ongoing refinements to the DCSO methodology are planned to ensure that local refineries are supplied as committed.
- NUPRC will continue to monitor the implementation of the Petroleum Industry Act to improve the efficiency of domestic crude supply.
Bottom Line
While crude oil producers offered volumes exceeding regulatory mandates in Q1 2026, pricing disputes under the “willing buyer, willing seller” model resulted in local refineries receiving less than half of the offered supply.
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