Oil-producing companies in Nigeria exported about 80 per cent of the country’s crude output exports despite rising domestic refining demand from local refineries, including the Dangote Petroleum Refinery. Industry data showed that international crude sales continued to dominate allocation patterns even as government authorities push for increased local supply to support refining capacity and reduce fuel import dependence.

Nigeria has intensified efforts to strengthen domestic refining following the expansion of private refining investments and rehabilitation projects involving state-owned facilities. The Federal Government has repeatedly encouraged upstream oil producers to prioritise supply to local refineries under the Domestic Crude Supply Obligation framework.

However, concerns have persisted over the ability of domestic refiners to secure consistent feedstock supplies as producers continue to prioritise foreign markets. Analysts say the dominance of crude output exports reflects the influence of existing international contracts, foreign exchange considerations, and pricing structures within the oil sector.

According to figures cited in the report, oil firms exported approximately 80 per cent of Nigeria’s crude production while allocating only a smaller portion to domestic refineries. Industry stakeholders said international sales remained more attractive to producers due to established export agreements and global pricing advantages.

The development comes as local refining capacity continues to expand, particularly with the commencement of operations at the Dangote Refinery and ongoing efforts to revive state-owned refineries managed by the Nigerian National Petroleum Company Limited (NNPCL). Energy analysts noted that increasing domestic refining activity would require adjustments to existing supply arrangements tied to crude output exports.

Officials familiar with the sector explained that while domestic supply obligations exist, producers still operate within commercial frameworks that favour international buyers capable of offering competitive pricing and stable off-take agreements. Some stakeholders also pointed to foreign exchange earnings as a major factor sustaining the high volume of crude output exports despite rising internal demand.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority and other industry regulators have continued consultations with operators over supply mechanisms intended to improve domestic crude availability. Analysts say resolving pricing disputes and aligning commercial interests will remain critical to reducing dependence on imported petroleum products and balancing crude output exports with local refining needs.

The continued export dominance raises broader questions about Nigeria’s energy transition strategy and the effectiveness of domestic refining policies. Economists say inadequate crude supply to local refineries could limit the country’s ability to achieve fuel self-sufficiency and stabilise domestic petroleum pricing.

Industry experts also warn that prolonged reliance on exports over domestic processing may reduce the broader economic benefits associated with refining, including job creation, industrial growth, and foreign exchange savings.