By Ukumbi Afrika 
Wednesday, 12th August 2026
Lagos —Nigeria is considering changes to its crude allocation and pricing framework aimed at improving access to domestic feedstock for refiners, including the Dangote Refinery, the Crude Oil Refinery-owners Association of Nigeria (CORAN) said.
The proposed reforms are expected to be discussed this week as Nigerian authorities review the implementation of the country's domestic crude supply obligation, which requires oil producers to make crude available to local refineries before exporting.
The move comes as refiners continue to face challenges obtaining sufficient domestic crude, despite Nigeria being one of Africa's major oil producers.
Key Highlights
Proposal would allow nearby producers to supply crude directly to refineries.
Refiners lifting crude directly from production facilities could receive pricing discounts.
Producer compliance with Nigeria's domestic crude supply obligation has risen above 90%.
Reforms could ease feedstock constraints at Dangote’s 650, 000-barrel-per-day refinery.
Pricing Seen as Major Constraint
Dangote Refinery has previously said Nigeria's existing pricing structure can add between $3 and $4 per barrel to its crude acquisition costs because purchases are often routed through trading arms of oil producers.
Industry analysts have similarly identified pricing, rather than physical crude availability, as one of the key obstacles to expanding domestic crude transactions.
Under one proposal being considered, producers connected to international oil companies could deliver crude directly to nearby refineries, with volumes reconciled later at the terminal.
Coran spokesperson Eche Idoko said the arrangement could reduce reliance on trunklines and bring crude physically closer to refineries.
A second proposal would allow refiners that lift crude directly from production facilities to receive a discount reflecting freight and handling costs incorporated into Brent-linked pricing but not actually incurred by the refiner.
“This could be a win-win for both the producers and refiners, ” Idoko said.
Compliance Improves
Data released on Monday by the Nigerian Upstream Regulatory Commission (NUPRC) showed that producer compliance with the domestic crude supply framework had increased to more than 90%, up from less than 43% in the previous quarter.
The compliance figure measures actual deliveries against crude volumes allocated by the regulator and does not indicate how much refinery demand has been satisfied.
Under the current framework, producers are required to offer allocated crude volumes to domestic refineries, with transactions conducted on a “willing-buyer, willing-seller” basis.
A NUPRC official confirmed that the proposed reforms were under consideration, largely following requests from inland refiners.
However, the official noted that implementation would require authorities to address differences in crude quality as well as adjustments to pricing mechanisms.
Implications for Dangote Refinery
The proposed changes could have significant implications for Dangote Refinery, Africa's largest refinery, with a capacity of 650, 000 barrels per day.
The facility has at times operated below potential because of difficulties securing sufficient domestic crude supplies. Easier access to nearby Nigerian crude and lower associated costs could improve refinery utilisation and strengthen the economics of domestic petroleum production.
For Nigeria, improving crude supply to local refineries could also support the government's broader objective of reducing reliance on imported refined petroleum products while increasing the value captured from the country's crude resources domestically.
Source: Reuters
Reporting: Isaac Anyaogu
Editing: Alexander Smith