The Federal Government has signalled a major shift in Nigeria’s petroleum industry, saying the country is moving towards refining a greater share of its crude oil domestically as expanding refining capacity positions it to become a regional hub for petroleum products.
The policy direction comes amid renewed efforts by regulators to strengthen the implementation of domestic crude supply obligations (DCSO), encourage investment in strategic infrastructure and enhance Nigeria’s competitiveness in the regional fuel market.
Speaking at the 49th Nigeria Annual International Conference and Exhibition (NAICE 2026) organised by the Society of Petroleum Engineers (SPE) Nigeria Council in Lagos, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Rabiu Umar, said the country was undergoing a structural transformation that could significantly reduce its long-standing reliance on crude oil exports.
According to Umar, the rapid expansion of refining capacity through large-scale private refineries and modular plants could, in the coming years, enable most of Nigeria’s crude oil production to be processed locally.
He said Nigeria now has more refining capacity than at any other time in its history and, with additional projects and planned expansions, is well positioned to become a refining hub for Africa.
Umar expressed optimism that the country’s targeted crude oil production of three million barrels per day in the coming years could largely be refined within Nigeria, creating greater value before export.
He described the transition as a landmark shift from the traditional model of exporting crude oil and importing refined petroleum products, noting that greater collaboration between the upstream, midstream and downstream segments of the industry would be essential.
According to him, the new approach would allow Nigeria to export more refined petroleum products rather than raw crude, thereby increasing value addition within the domestic economy.
The NMDPRA chief said the policy aligns with the Federal Government’s efforts to enforce the Domestic Crude Supply Obligation under the Petroleum Industry Act (PIA), which is intended to ensure adequate feedstock for local refineries.
He disclosed that the authority was working closely with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to ensure effective implementation of the policy.
Umar said increased domestic refining would also stimulate growth across the gas and petrochemical value chains, creating additional economic opportunities beyond crude oil production.
He noted that exporting refined petroleum products, rather than crude oil, would generate greater economic value through downstream processing and industrial development.
Beyond refining, Umar identified energy security, gas expansion and regulatory efficiency as the NMDPRA’s three strategic priorities.
He said the authority was strengthening Nigeria’s strategic petroleum reserves and expanding storage infrastructure to improve energy security, reduce exposure to global supply disruptions and cushion the impact of international price volatility.
