NNPCL is struggling with its crude-for-loan agreements, which tie large portions of Nigeria’s oil to debt obligations. These commitments may last until 2029. At the same time, demand for crude oil from local refineries is growing.
The Port Harcourt, Warri, and Dangote refineries are now operational, increasing the need for crude. NNPCL has pledged 272,500 barrels per day of crude to secure $8.86 billion in loans. These agreements are limiting the crude available for local refineries.
Between January and June 2025, Nigerian refineries will need over 123 million barrels of crude. But NNPCL must meet its debt obligations. In June 2024, it had repaid $2.61 billion, leaving $6.25 billion outstanding.
Stakeholders worry that local refineries will face shortages. They urge NNPCL to prioritize domestic supply. IPMAN said international standards ensure refineries receive a set percentage of crude. But they warned the government to be cautious.
Energy expert Prof. Yemi Oke stated that refineries don’t have to buy Nigerian crude. However, the Naira-for-crude deal makes Nigerian oil attractive. Oke believes Nigeria can increase production from 1.5 million to 2 million barrels per day. This would secure enough crude for both local refineries and exports.
PETROAN’s Joseph Obele called for prioritizing crude supply to local refineries. Without this, refineries could shut down.