Nigeria’s Refining Capacity Hits 62% Amid Crude Shortages and Technical Challenges

Nigeria’s oil refining sector continues to struggle with low utilisation despite having a combined installed capacity of 1.125 million barrels per day, the Federal Government has revealed. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated that refinery operations averaged just 61.58% between the first and third quarters of 2025, hampered by technical limitations, crude supply shortages, and frequent downtime at state-owned facilities.

Currently, only four refineries—Dangote, Aradel, Edo, and Waltersmith—are operational, together producing 467,000 barrels per day. Among these, the Dangote Refinery remains the largest, with a capacity of 650,000 barrels per day, though it processed only 449,000 barrels in October. Despite plans to expand output to 1.4 million barrels per day, the facility is still operating below its potential, reflecting broader challenges in Nigeria’s refining sector.

Several conventional and modular refineries are either under rehabilitation or in early stages of construction. The Port Harcourt Refinery, for instance, consists of an older 60,000-barrel unit and a new 150,000-barrel train, while Warri and Kaduna refineries have capacities of 125,000 and 110,000 barrels per day, respectively. In the modular sector, small-scale plants such as Waltersmith, Duport, Edo, OPAC, and Aradel are attempting to fill production gaps, yet they remain constrained by inconsistent crude supply.

Industry stakeholders point to crude shortages as the major roadblock preventing refineries from reaching full capacity. The Crude Oil Refinery-Owners Association of Nigeria (CORAN) has repeatedly urged the government to enforce the domestic crude supply obligations under the Petroleum Industry Act (PIA). According to CORAN, modular refineries can only scale operations if guaranteed feedstock and robust funding support are provided.

The NMDPRA’s data and industry insights underscore the widening gap between Nigeria’s ambitious refining targets and actual output. While 47 licences to establish refineries have been issued since 2000, with 31 licences granted for construction, only a few plants are actively under development. As the country aims to reduce petrol imports and strengthen local supply chains, resolving crude supply bottlenecks and addressing technical inefficiencies will be critical for achieving self-sufficiency in refined products.

source: punch