A continued shortfall in crude oil supply to domestic refiners has kept the capacity utilisation of refineries at just 57.8 per cent, leaving over 42 per cent of Nigeria’s installed refining capacity idle.

Latest industry data reviewed by Sunday PUNCH showed that out of a combined capacity of 1,214,000 barrels per day across 10 refineries viewed as operational by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, technical constraints and inadequate crude feedstock remain the primary bottlenecks limiting improved petroleum production.

The combined refining output from Nigeria’s state-owned, private, and modular refineries currently stands at 701,692 barrels.

The refineries include the Dangote Petroleum Refinery Company, Aradel Refinery, Opac Refinery, Waltersmith Refining & Petrochemical Limited, and Duport Midstream Limited.

Others are the Edo Refining and Petrochemicals Company Limited, Port Harcourt Refining Company (New), Warri Refining & Petrochemical Company, Kaduna Refining & Petrochemical Company Limited, and the old Port Harcourt Refining Company.

To operate at full capacity, these facilities still require an additional 512,308 barrels, highlighting a significant supply shortfall that seems to undermine efforts to fully utilise domestic refining infrastructure and reduce dependence on imported petroleum products.

This situation persists despite the Federal Government’s pledge to ensure adequate crude supply to local refiners through the Domestic Crude Supply Obligation, which mandates 770,500 barrels per day—amounting to 23.8 million barrels monthly—for the first half of 2025.

In February, the Nigerian Upstream Petroleum Regulatory Commission instructed exploration and production companies to meet the demand for crude oil by local refineries.

The agency warned that it would deny export permits for crude oil cargoes intended for domestic refining if oil companies fail to meet their local crude supply commitments.

However, the directive has largely been ineffective, with many exploration companies failing to comply, forcing refineries, including the Dangote Refinery, to resort to importing crude feedstock from abroad to sustain operations.

The NMDPRA document detailing midstream and downstream operations revealed that the nation’s 10 operational refineries are significantly underperforming, with crude supply bottlenecks accounting for the shortfall.

The report listed “technical constraints/crude supply” as the key factor hampering refinery capacity utilisation.

It also advised the full implementation of the DCSO as a measure to improve refining capacity while approving LTC-30 and LTE-47 as new project licenses.

Commenting in an earlier interview with our correspondent, the National Publicity Secretary of the Crude Oil Refinery-owners Association of Nigeria, Eche Idoko, said the persistent unavailability of crude oil has significantly hindered investments in the establishment and full capacity operations of seven new and existing refineries across the country.

He also warned that without a steady and reliable supply of crude, the ambitious objective to attract investors and investments aimed at boosting local refining capacity and reducing dependence on imports may remain elusive.

The national officer explained that these facilities are currently unable to scale past the final investment decision stage because they cannot secure a source of feedstock.

Idoko said, “The major challenges that investors have had with completing the proposed plants in Nigeria is that a lot of these plants need to get past the Final Investment Decision stage and for them to pass this stage, which is the final financial investment stage, they would have to guarantee and allay the fears of investors on some challenges.

“And one of the major fears that they have is the availability of crude. So crude availability is a major issue, and the news making the rounds about the unavailability of crude to refineries that are already operating is not making our case easier.”

The document further indicated that Nigeria’s gas processing plants fared slightly better, with a utilisation rate of 63 per cent from an installed capacity of 6.1 billion standard cubic feet per day.

However, gas transportation and distribution networks remain weak, operating at just 25 per cent and below 30 per cent, respectively.

The downstream infrastructure review also revealed that product depots have a capacity utilisation of less than 50 per cent, while LPG/CNG facilities are above 85 per cent capacity due to growing market demand.

It further disclosed that retail outlets have increased to 22,681 stations, but face “huge redundancy” owing to slow market growth.

New licensing data also indicate a drive toward revamping the sector, with 30 new Large-Scale Technical and 47 Large-Scale Environmental refinery project licences issued.