Nigeria is considering a domestic crude oil swap arrangement that could cut refining costs by between three and four dollars per barrel.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is consulting oil producers, refiners and other industry stakeholders on a proposal to enable refineries to receive crude oil from the nearest suitable production or export point, rather than transport allocated supplies over long distances.
The proposed arrangement is expected to reduce transportation costs and ease crude supply challenges facing domestic refineries. However, the commission has yet to announce a commencement date or clarify how the costs of facilitating the swaps would be shared.
The plan comes as domestic refineries received more than 127 million barrels of crude oil and condensate between January and September 2026 under the Domestic Crude Supply Obligation.
According to the report, crude deliveries improved in the second quarter, with refineries receiving 53.7 million barrels, representing 97.4 per cent of allocated volumes.
However, deliveries declined to 45.1 million barrels in the third quarter, equivalent to 76.2 per cent of allocations.
Meanwhile, Nigeria’s crude oil and condensate production averaged 1.717 million barrels per day in September, while crude oil production alone stood at 1.53 million barrels per day, according to the regulator.
The commission said it was also working with relevant industry stakeholders to better align crude oil supply with refinery demand.
The broader objective, it added, is to ensure that gains in domestic oil production translate into benefits for businesses, households and electricity generation.
