Nigeria is currently caught in a strange paradox where the country is shipping massive amounts of crude oil abroad while its own world-class facility, the Dangote Petroleum Refinery, struggles to get enough raw crude to stay running.
Despite being Africa’s largest oil producer, Nigeria exported over 55 million barrels of oil in just the first two months of 2026.
Meanwhile, the $20 billion Lekki-based plant is operating at a fraction of its capacity because it simply cannot get the local supply it was promised.
The math behind this shortage is eye-opening. In January and February of 2026, Nigeria pumped about 81.94 million barrels of oil, but more than 55 million of those barrels were sent to other countries.
This left only about 26 million barrels for all local refineries combined. When you consider that the Dangote refinery alone needs nearly 20 million barrels every single month to run at full speed, the problem becomes clear. Over a recent five-month stretch, the facility received less than 27% of the oil it actually required to function properly.
Several factors are causing this bottleneck. Insiders at the national oil company, NNPC, admit that some of Nigeria’s oil was “front-sold” or used as collateral for past loans, meaning that oil is already spoken for and must be exported to pay off debts.
Additionally, because local producers aren’t supplying enough, the refinery is forced to buy oil from international traders who charge extra fees.
While the NNPC claims it is helping by sourcing oil through its global network, it is selling that oil at high international market prices rather than discounted local rates.
This supply tug-of-war isn’t just a corporate headache; it hits the average citizen directly at the gas pump. When the refinery has to pay international prices plus shipping fees for oil that is physically sitting in its own backyard, those costs are passed down to the consumer.
This is a major reason why petrol prices recently spiked above N1,200 per litre.
