Dangote takes 52.6m barrels as DCSO performance hits 97.4% – NUPRC

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Crude oil deliveries to Nigeria’s domestic refineries surged by 88.4 per cent in the second quarter of 2026, as the Federal Government’s Domestic Crude Supply Obligation recorded a 97.4 per cent performance, new data from the Nigerian Upstream Petroleum Regulatory Commission have shown.

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The NUPRC disclosed that local refineries received 53.7 million barrels of crude oil and condensate between April and June, compared with 28.5 million barrels delivered in the first quarter.

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The latest figure represents an increase of 25.2 million barrels, or 88.4 per cent, over the 28.5 million barrels supplied to domestic refineries in Q1.

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The sharp improvement marks a significant turnaround in the implementation of the DCSO, which struggled to convert producers’ offers into actual deliveries in the first quarter.

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The commission, in a statement issued by its Head of Media and Corporate Communications, Eniola Akinkuotu, on Monday, said the Q2 figures showed that the DCSO was being actively administered and enforced.

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The development is particularly significant for the Dangote Petroleum Refinery, which accounted for the bulk of the crude volumes offered by producers during the quarter and ultimately accepted 52.6 million barrels.

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According to the regulator, producers offered 68.1 million barrels to the Dangote refinery against its requirement of 63 million barrels during the three-month period.

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However, the refinery accepted 52.6 million barrels, meaning it took 78 per cent of the crude volumes offered to it.

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The NUPRC said the 68.1 million barrels offered to Dangote represented 98 per cent of all crude volumes offered to local refineries during the quarter.

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The latest data therefore show that while producers significantly exceeded their regulatory allocations and offered more crude than Dangote required, the actual volume received by the refinery remained below the quantity offered.

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The commission said the improvement in domestic crude supply coincided with increased oil production and the signing of long-term crude supply agreements supported by bankable sales and purchase agreements between producers and domestic refiners.

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The NUPRC said, “The statistics shows that DCSO is being actively administered and enforced by the NUPRC. On a monthly basis, the Commission meets with stakeholders including crude oil producers and local licensed refineries after which the producers are allocated a specific volume of their crude oil and condensate which should be offered to local licensed refineries.

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“However, in line with the PIA, the framework operates on a ‘willing buyer, willing seller’ basis, which shapes eventual outcomes.”

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The Q2 performance represents a dramatic improvement from the first three months of the year.

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In Q1, the NUPRC allocated 61.9 million barrels to domestic refineries, while producers offered 68.7 million barrels. Actual deliveries, however, stood at only 28.5 million barrels.

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Based on the NUPRC figures, actual deliveries in Q2 were 25.2 million barrels higher than in Q1, representing an 88.4 per cent increase.

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Performance against allocated volumes also rose sharply. The 28.5 million barrels delivered in Q1 represented about 46.0 per cent of the 61.9 million barrels allocated, compared with 97.4 per cent in Q2.

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That means DCSO performance improved by about 51.4 percentage points between the two quarters.

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At the allocation level, however, Q2 recorded a slight decline. The 55.1 million barrels allocated during the quarter were 6.8 million barrels, or 11 per cent, lower than the 61.9 million barrels allocated in Q1.

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Producers nevertheless offered 69.3 million barrels in Q2, about 600,000 barrels, or 0.9 per cent, higher than the 68.7 million barrels offered in Q1.

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The major difference was therefore not in the quantity allocated or offered but in the ability to convert those offers into actual deliveries.

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In Q1, only about 41.5 per cent of the 68.7 million barrels offered by producers reached local refineries. In Q2, approximately 77.5 per cent of the 69.3 million barrels offered were actually supplied.

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This represents an improvement of roughly 36 percentage points in the conversion of crude offers into physical deliveries.

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The improvement became evident from April when producers supplied more crude than the volume allocated to them.

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The NUPRC said it allocated 18.13 million barrels to producers for domestic refineries in April, but producers offered 19.31 million barrels.

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Actual deliveries eventually rose to 20.88 million barrels, meaning supply exceeded the allocation by 2.75 million barrels, representing a performance of 114.9 per cent.

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The commission said, “In the month of April, following consultations with stakeholders, 18,127,638 barrels were allocated to producers.

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“However, the producers exceeded expectations, offering 19,312,476 barrels to refiners. Eventually, 20,879,381 barrels were supplied to local refiners, meaning the producers met 114.9 per cent of their allocation.”

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May, however, witnessed another shortfall.

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Although producers were allocated 18.78 million barrels and offered 23.19 million barrels, actual supply fell to 14.23 million barrels.

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That represented 75.8 per cent performance against the allocation.

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The commission said producers had again exceeded the volume allocated to them, but the actual quantity received by local refineries was lower.

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“In May, the Commission, in enforcing its DCSO, allocated 18,778,392 barrels of crude oil to the producers, but the producers, exceeding their expectation once again, offered 23,187,893 barrels to the local refiners.

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“However, the producers’ actual supply to the refiners by the end of the month stood at 14,228,865 barrels, representing 75.8 per cent compliance.”

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June subsequently recorded another strong performance, with actual deliveries exceeding the allocated volume.

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The NUPRC allocated 18.17 million barrels to producers, while they offered 26.84 million barrels. Local refiners eventually took 18.61 million barrels, representing 102.4 per cent performance.

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“In the month of June, the Commission allocated 18,172,638 barrels to the producers. The producers offered 26,835,119 barrels to refiners, which in turn took 18,606,026 barrels, representing a 102.4% performance.”

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The Dangote refinery emerged as the dominant recipient under the Q2 DCSO framework.

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The refinery required 63 million barrels during the quarter, while producers offered 68.1 million barrels, exceeding its requirement by 5.1 million barrels.

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However, Dangote accepted 52.6 million barrels, leaving 15.5 million barrels of the crude offered to it unaccepted.

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The refinery’s actual intake therefore represented about 83.5 per cent of its stated requirement and 77.2 per cent of the 68.1 million barrels offered.

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The development is significant because the refinery, with a nameplate capacity of 700,000 barrels per day, requires a steady supply of crude to operate at high utilisation and support Nigeria’s drive to reduce dependence on imported refined petroleum products.

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The latest DCSO figures suggest that the supply environment has improved considerably compared with the first quarter, although the gap between crude offered and crude accepted by Dangote shows that supply commitments do not always translate into actual refinery intake.

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The Q2 improvement also contrasts sharply with the problems recorded during the first quarter.

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The NUPRC’s Q1 report showed that 61.9 million barrels were allocated to domestic refineries, against 68.7 million barrels offered by producers, but only 28.5 million barrels were eventually delivered.

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The commission attributed the gap mainly to pricing differences between crude producers and domestic refiners and stressed that the DCSO framework operates under a “willing buyer, willing seller” arrangement.

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In Q2, however, the NUPRC linked the improved performance to increased crude production and the emergence of longer-term commercial arrangements between producers and refiners.

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The commission said, “The Commission observed that the improvement in DCSO coincided with an increase in local oil production and the signing of the long-term crude supply agreement supported by a bankable Sales and Purchase agreement between the Producers and Domestic refiners.”

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The development comes as Nigeria seeks to increase domestic refining and reduce its longstanding dependence on imported petroleum products.

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The DCSO was established under the Petroleum Industry Act to require crude producers to make crude available to domestic refineries, supporting the government’s objective of ensuring that more of Nigeria’s crude is processed locally.

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However, the “willing buyer, willing seller” principle means that regulatory allocation alone does not guarantee that the crude will ultimately be delivered or accepted.

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The Q1 figures illustrated that problem clearly, with producers offering more crude than the amount allocated but actual deliveries falling far below both figures.

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The Q2 numbers suggest that the gap is beginning to narrow as production improves and producers and refiners enter into longer-term commercial agreements.

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The NUPRC said it would continue to enforce the DCSO while supporting higher domestic crude production.

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It added, “The Commission reaffirms its commitment to achieving the government’s objective of energy sufficiency. Leveraging the framework of the PIA, 2021, the Commission aims to sustain recent gains in crude oil production while continuously enforcing the DCSO.”

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The improved performance will be closely watched by the domestic refining industry, particularly Dangote, which has become a major consumer of Nigerian crude as it ramps up operations.

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For the government, sustained improvement in domestic crude deliveries is critical to ensuring that Nigeria’s expanding refining capacity is matched by adequate local feedstock.

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The Q2 data indicate that while the DCSO framework still faces commercial and operational challenges, the conversion of allocations and offers into actual refinery deliveries improved markedly during the quarter.

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