Nigeria: Africa’s leading producer of crude oil, the country aims to become the top refiner.

This situation forces Nigeria to import refined products at high prices, despite the significance of its reserves and oil production. The federal government now aims to end this model, according to Rabiu Umar, the Managing Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA.

Speaking on Tuesday, August 4, in Lagos, Mr. Umar indicated that authorities are working to develop national refining capacities. The goal is to enable the country to process more of the oil extracted from its territory before resorting to imports.

Nigeria hopes to produce up to three million barrels of crude oil per day. Authorities want this production to supply more of the national refineries, in order to limit the purchase of fuels and petroleum products on international markets.

A Costly Dependence on Imports

For several decades, Nigerian refineries have faced technical and operational challenges, forcing Africa’s top crude producer to import a significant part of its fuels. This dependence has strained public finances and exposed the country to fluctuations in international prices.

Increasing refining capacities is thus one of the federal government’s priorities. It aims to bring crude oil production closer to domestic consumption, as Nigeria continues to export its raw materials while importing finished products.

The strategy announced by the authorities aims to elevate a greater share of oil within the country. It should also help reduce costs associated with transporting and purchasing refined products abroad.

For the NMDPRA, the transformation of the sector must accompany the enhancement of refining infrastructure. The government thus intends to transition Nigeria from a crude oil exporter heavily reliant on imports to a major refining player in Africa.