Nigerian refineries could save between $246.6 million and $328.8 million over six months if the proposed crude oil swap system reduces the cost of transporting crude to local refineries.
The estimate is based on 82.2 million barrels of crude supplied to domestic refineries between January and June 2026, with potential savings of $3 to $4 per barrel.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is developing the proposed arrangement in consultation with oil producers, refiners and other industry stakeholders.
Under the system, refineries would be allowed to obtain crude from the nearest available terminal instead of transporting supplies from distant locations. The companies involved would later reconcile the volumes at the designated export terminal.
Eche Idoko, National Publicity Secretary of the Crude Oil Refiners Association of Nigeria (CORAN), said the arrangement could eliminate significant logistics expenses. He noted that transportation costs can range from $3 to $4 per barrel and may be higher when barging is involved.
The proposed swap would not change the international price of crude. Rather, it would remove additional logistics and acquisition costs, making crude cheaper for local refiners.
Dangote Petroleum Refinery is also expected to benefit from the arrangement.
Idoko said a crude trading platform for domestic refiners had also been agreed upon by industry stakeholders to improve access to crude and make transactions more efficient.
NUPRC figures show that refineries received 28.5 million barrels in the first quarter, which could have generated savings of $85.5 million to $114 million under the proposed $3-$4 per barrel reduction.
In the second quarter, 53.7 million barrels were supplied, translating to potential savings of $161.1 million to $214.8 million.
The combined six-month volume of 82.2 million barrels therefore gives a potential saving of $246.6 million at $3 per barrel or $328.8 million at $4 per barrel.
The figures are projections and do not represent money already saved, as the proposed swap framework was not operational during the first half of 2026.
The initiative is also aimed at addressing the gap between crude allocated to domestic refineries and the quantities actually delivered. In the first quarter, 61.9 million barrels were allocated to local refineries and 68.7 million barrels were offered by producers, but only 28.5 million barrels were supplied.
NUPRC is still working on the framework, with industry stakeholders expecting the proposed trading platform and crude swap system to improve crude availability and reduce operating costs for Nigerian refineries.
