Chinedu Obieze
Nigeria’s crude oil production has reached a significant milestone of about 1.8 million barrels per day, prompting renewed calls from domestic refiners and organised labour for increased crude supply and lower fuel prices. The improvement in national output, confirmed by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), offers a potential boost to local refining operations, particularly the Dangote refinery and smaller modular facilities.
Eche Idoko, spokesperson for the Crude Oil Refiners Association of Nigeria, said refiners would intensify demands for more crude in light of the reported production growth. “We heard that the Nigerian National Petroleum Company Limited plans to increase cargoes to Dangote refinery from five to seven per day. While this is a positive step, seven out of 14 required cargoes is still insufficient,” he said.
The NUPRC, in a statement by Head of Media and Corporate Communications Eniola Akinkuotu, revealed that daily oil production had risen to 1.8mbpd, with a target of 2mbpd. Chief Executive Oritsemeyiwa Eyesan said the March increase followed the completion of turnaround maintenance and resolution of operational disruptions at strategic facilities, which had affected output in February.
Idoko highlighted the critical role of the Domestic Crude Supply Obligation (DCSO) in ensuring that higher production translates into tangible benefits for local refineries. “Increasing crude production helps, but only if the DCSO is effectively implemented. Without adequate supply to refineries, higher production alone will not improve operations or reduce fuel prices,” he said.
Domestic refiners, particularly modular plants, face profitability challenges without consistent feedstock. According to Idoko, securing sufficient crude volumes directly impacts cash flow, profitability, and operational efficiency. “If the oil producers give us feedstock, we will make gains. That’s how good the refining business is,” he explained. The benefits extend to the government as well, with improved refinery output expected to boost tax revenues and levies.
The Nigerian Labour Congress (NLC) also welcomed the rise in crude production but stressed that accurate verification of output remains a challenge. The union pointed out that Nigeria is one of the few oil-producing countries where crude production is not fully metered at export warehouses. “Production figures from flow stations do not reflect losses or discrepancies along pipelines. This data inefficiency raises questions about actual output levels,” a senior NLC official stated.
Despite these concerns, labour maintains that higher production should increase domestic crude supply, reduce reliance on imported petroleum products, and create opportunities for lower fuel prices. “With oil production at 1.8 million barrels per day, we should supply domestic refineries like Dangote and modular plants to produce more white products and diesel. This would shield the economy from international oil market volatility,” the official added.
The NLC warned that unless increased production leads to tangible benefits for refining, regulation, and consumer pricing, Nigerians may not experience positive economic outcomes. The union noted that fuel prices have continued to rise despite Nigeria’s status as an oil-producing nation, with global disruptions, such as tensions in the Strait of Hormuz, only indirectly affecting local prices. “The persistent high cost of fuel highlights regulatory weaknesses and raises concerns about market governance,” the labour source said.
Nigeria’s domestic refining sector has long struggled with inconsistent crude supply, pricing disputes, and infrastructure limitations. Even with increased national output, challenges in implementing the DCSO and agreeing on competitive pricing have hindered optimal refinery performance. Modular refineries, in particular, require reasonable crude costs to break even and contribute meaningfully to the domestic fuel supply.
Industry analysts argue that if properly managed, the recent rise in crude production could generate windfall revenues for Nigeria. With global oil prices trading above $100 per barrel, significantly higher than the government’s budget benchmark of around $64, the country stands to earn an estimated $40 to $50 above projections for each barrel produced. At 1.8 million barrels per day, this surplus represents a substantial fiscal opportunity, provided that revenue management is transparent and efficient.
The NUPRC’s Eyesan expressed confidence that production levels would continue to improve. “We are doing 1.84 million barrels per day. That is a remarkable feat, and we are optimistic about further gains,” she said during a visit to the Ministry of Finance headquarters in Abuja, where Minister Wale Edun commended the progress.
Both domestic refiners and organised labour emphasise that the economic impact of higher production is contingent on effective policy implementation. Adequate crude supply to refineries, transparent pricing mechanisms, and strengthened regulatory oversight are critical to ensuring that Nigerians benefit from the country’s oil wealth.
Experts also highlight the broader economic benefits of improved local refining. Consistent crude supply would not only support profitability for modular and private refineries but also reduce Nigeria’s dependence on imported petroleum products, stabilise fuel prices, and enhance government revenue collection.
The recent production improvement represents an opportunity for Nigeria to bridge gaps in energy infrastructure, strengthen domestic refining capacity, and support economic growth. However, the success of these initiatives will depend on coordinated action by the government, the Nigerian National Petroleum Company, refiners, and regulators to align production with domestic consumption needs.
As Nigeria navigates the complexities of global oil markets, the interplay between crude output, domestic refining, and fuel pricing remains a critical factor for both economic stability and consumer welfare. The combined pressure from refiners and labour unions underscores the urgency of translating increased oil production into tangible benefits for Nigerian households and the broader economy.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.