The Federal Government has indicated a major shift in Nigeria’s petroleum industry, saying the country is moving towards an era in which more crude oil will be refined locally as expanding refining capacity transforms Africa’s largest oil producer into a regional hub for petroleum products.
 
The development comes amid renewed efforts by regulators to tighten the implementation of domestic crude supply obligations (DCSO), deepen investments in strategic infrastructure and strengthen Nigeria’s position 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 Nigeria was witnessing a structural transition that could fundamentally alter the country’s decades-old dependence on crude oil exports.
 
According to him, the rapid expansion of refining capacity through large private refineries and modular plants could eventually result in most of Nigeria’s crude production being processed domestically.
 
“The fact that today we have more refining capacity in Nigeria than we’ve ever had, and, of course, with the projects that are on stream and the expansions that we are also going to witness in the coming years, clearly Nigeria is going to turn into a refining hub for Africa.
 
“Perhaps every single molecule of our three million barrels a day production that we hope to achieve in the next couple of years will actually be refined locally,” Umar said.
 
The NMDPRA chief said the transition represented a significant departure from Nigeria’s traditional model of exporting crude oil and importing refined petroleum products.
 
“What that means, and I think this is a monumental shift, is a handshake between the upstream, midstream and downstream sectors. Effectively, it’s not just exporting the raw crude, but making sure that what we actually end up exporting is the refined petroleum products,” he said.
 
The policy direction comes as the government intensifies efforts to enforce domestic crude supply obligations under the Petroleum Industry Act (PIA), a move aimed at guaranteeing feedstock availability for local refineries.
 
Umar said the NMDPRA was working closely with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to ensure the effective implementation of the policy.

“True resilience requires operational and commercial balance. We remain steadfast in working with our sister agency, the NUPRC, in enforcing the domestic crude supply obligation,” he said.
 
According to him, the policy is expected to strengthen value addition within the country while expanding opportunities across the gas and petrochemical industries.
 
“The more refined products we can export, the more value we create because, after extraction, we are also adding value, including in the gas and petrochemical sectors as well,” he added.
 
Beyond refining, Umar outlined the agency’s three major priorities: energy security, gas expansion and regulatory efficiency.
 
He said the authority was strengthening strategic petroleum reserves and expanding storage infrastructure to minimise the impact of global supply disruptions and price volatility.