Nigerian refineries could save up to $328.8 million with proposed crude swap arrangement
Nigerian domestic refineries, including Dangote Petroleum Refinery, could have saved between $246.6 million and $328.8 million in the first half of 2026 if a proposed crude swap arrangement had been active. The Nigerian Upstream Petroleum Regulatory Commission NUPRC is consulting with stakeholders to implement this arrangement, which aims to reduce supply costs and ensure more crude availability for local refineries. The potential savings are based on an estimated $3 to $4 per barrel reduction in logistics and acquisition costs for the 82.2 million barrels supplied to domestic refineries under the Domestic Crude Supply Obligation between January and June. Eche Idoko, National Publicity Secretary of the Crude Oil Refiners Association of Nigeria CORAN, explained that the swap would eliminate costly transportation by allowing refiners to receive crude from the nearest available terminal. Logistics costs can sometimes exceed $4 per barrel, and even reach $12 per barrel for barging operations. The framework, which is still under development, would involve a refinery taking crude from a closer producer or export terminal, with subsequent reconciliation of volumes at the original export terminal. This initiative is expected to strengthen compliance with the Domestic Crude Supply Obligation and Domestic Gas Supply Obligation, reduce the need for long-distance crude transport, and address persistent complaints from domestic refiners regarding crude cost and availability. The NUPRC and
