FG launches crude trading platform to boost local refining, position Africa for energy supply shift
— As refineries cut import dependence

By Eyo Nsima

The Federal Government has introduced an automated crude oil trading platform designed to connect regulators, crude oil producers, refineries and oil marketers, in a move aimed at improving crude oil production, allocation, pricing and delivery to indigenous refineries.

The platform is expected to address longstanding challenges surrounding the Domestic Crude Supply Obligation (DCSO) and improve coordination among key players in Nigeria’s oil industry.

Before now, the various stakeholders largely operated in silos, making it difficult to engage effectively, reach agreements and take timely decisions on crude supply to local refineries.

The development has wider implications for Africa, as Nigeria’s growing refining capacity could gradually transform the country from a major importer of refined petroleum products into a regional supplier, reducing Africa’s dependence on imported fuels and strengthening intra-African energy trade.

In its latest report, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, said the Dangote Refinery required 63 million barrels of crude oil in the second quarter of 2026, while producers offered 68.1 million barrels.

However, only 52.6 million barrels were eventually accepted by the refinery, representing 78 per cent of the crude volumes offered.

Responding to the development, the Group Vice President, Oil & Gas and Fertiliser, Dangote Industries Limited, Devakumar Edwin, said the company remained willing to purchase Nigerian crude oil, provided it was available in sufficient volumes and at competitive market prices.

“Our position is straightforward. We are ready and willing to purchase Nigerian crude oil, provided it is available in sufficient volumes and at competitive market prices. Like every refinery, we must procure crude that supports sustainable operations and value creation.

“This is essential to maintaining the economics of domestic refining and enabling us to deliver petroleum products to Nigerians at affordable and competitive prices,” he said.

A demonstration of the crude oil trading platform presented to stakeholders in Lagos on Thursday showed that regulators, producers, refiners and traders would be able to engage in live transactions.

The platform could therefore help reduce some of the disputes, delays and uncertainties that have characterised crude supply to local refineries, particularly under the DCSO framework.

Implications for Africa

The development comes at a time when African countries are seeking to reduce their vulnerability to international petroleum product supply disruptions, high freight costs and foreign exchange pressures associated with importing refined fuels from outside the continent.

With Nigeria possessing one of Africa’s largest crude oil reserves and a rapidly expanding refining base, a sustained increase in domestic refining could have significant regional implications.

Greater availability of locally refined products could create opportunities for Nigeria to supply neighbouring West African markets, strengthen regional petroleum trade and reduce the continent’s dependence on supplies from Europe, the Middle East and other external markets.

It could also support the development of African shipping, storage, trading and logistics networks around Nigeria’s emerging refining hub.

However, the ability of Nigeria to realise these opportunities will depend largely on reliable crude oil supply, competitive pricing, efficient logistics, adequate infrastructure and sustained refinery operations.

Refineries reducing import dependence

Speaking with Vanguard, the President of the Crude Oil Refinery-Owners Association of Nigeria (CORAN) and Chairman of OPAC Refineries, Momoh Jimah Oyarekhua, said local refineries were increasingly meeting domestic demand for petroleum products, significantly reducing Nigeria’s reliance on imports.

Oyarekhua said Nigerians were increasingly relying on products refined locally, describing the development as an important step towards strengthening domestic production.

According to him, Nigeria is already on track to becoming a net exporter of petroleum products as local refining capacity continues to expand.

“We are doing very well. Today, I think we have brought down importation significantly. At least Nigerians are relying more on internal production of petroleum products like it used to be some years back,” Oyarekhua said.

He, however, identified crude oil availability as one of the major challenges confronting refinery operators.

Oyarekhua said the DCSO remained one of the issues being addressed by stakeholders and relevant authorities, expressing optimism that the challenges would gradually be resolved.

He said improved cooperation between regulators, crude producers and refinery operators would enable domestic refineries to obtain the volumes required to operate at optimal capacity.

“Gradually, we are seeing that those problems are being solved, but we are thinking with time, this is going to be completely optimised and all the refineries will of course get the crude that they require,” he said.

Regional supply opportunity

On measures to move the downstream petroleum sector forward, the CORAN president said refinery owners and other stakeholders were collaborating to strengthen Nigeria’s domestic supply chain.

He noted that downstream operators were increasingly purchasing petroleum products from Nigerian refineries rather than relying on imports, describing the shift as the desired direction for the industry.

For Africa, a successful transition could go beyond Nigeria’s domestic market. Increased refining output could support the African Continental Free Trade Area by encouraging greater intra-African trade in petroleum products and reducing the continent’s exposure to international supply shocks.

It could also improve Nigeria’s energy security while creating a potential export platform for refined products across West and Central Africa.

Oyarekhua said stakeholders would continue to engage and collaborate with downstream operators to ensure steady improvement in the sector.

The success of the new crude trading platform will therefore be closely watched, not only for its ability to resolve Nigeria’s domestic crude supply challenges, but also for its potential to strengthen Nigeria’s position as a refining and petroleum-products hub for Africa.