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The Dangote Petroleum Refinery and other local refineries could save between $246.6 million and $328.8 million in logistics costs if Nigeria’s proposed crude swap arrangement is implemented, according to industry estimates.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) confirmed consultations with stakeholders on a domestic crude oil and gas swap framework aimed at cutting supply costs and ensuring more crude is available to refineries. The initiative is expected to strengthen compliance with the Domestic Crude Supply Obligation (DCSO) while reducing the need for costly long-distance transportation.
Between January and June 2026, domestic refineries received 82.2 million barrels of crude under the DCSO. At an estimated $3–$4 per barrel saving, the swap could have delivered $246.6m–$328.8m in cost reductions. “Yes, the crude swap will save around $3–$4 per barrel,” said Crude Oil Refiners Association of Nigeria spokesman Eche Idoko. “Sometimes, it is more, like $5. If you are doing barging like Dangote, it is as high as $12.”
Data showed 28.5 million barrels were supplied in Q1, translating to $85.5m–$114m in potential savings, while Q2 supplies of 53.7 million barrels could have saved $161.1m–$214.8m. Average supply across the six months stood at 454,144 barrels per day.
Idoko explained that the swap would allow refineries to take crude from the nearest terminal, with producers reconciling volumes at the original export point.
“The swap simply means you can swap crude for refineries as a crude producer… reconciliation can be made between the supplier and the owners of the crude,” he said.
The framework will operate within the DCSO, with NUPRC overseeing supply and the Nigerian Midstream and Downstream Petroleum Regulatory Authority providing demand data.
Stakeholders, including producers and refiners, have agreed to support the initiative. “In a few months, we will see a complete change in the supply and trading framework,” Idoko added.
The reform comes amid persistent complaints about crude costs and availability. In Q1, 61.9 million barrels were allocated to refineries, 68.7 million offered, but only 28.5 million supplied.
The swap is positioned as both a cost-cutting measure and a way to close the gap between allocated and delivered volumes.
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