Proposed Crude Swap Could Save $329M for Refineries

The Dangote Petroleum Refinery and other local refineries could potentially save between $246.6 million and $328.8 million on crude supplied in the first half of 2026 if a proposed crude swap arrangement is implemented. The Nigerian Upstream Petroleum Regulatory Commission has begun consultations with industry stakeholders regarding this domestic crude oil and gas swap initiative, which aims to reduce supply costs and enhance crude availability for local refineries.

The projected savings are based on 82.2 million barrels of crude supplied under the Domestic Crude Supply Obligation between January and June, with an estimated reduction of $3-$4 per barrel in logistics and acquisition costs. Eche Idoko, the National Publicity Secretary of the Crude Oil Refiners Association of Nigeria, stated that the swap would eliminate costly transportation from distant locations, potentially saving refiners significant logistics costs.

The arrangement could lead to savings of $246.6 million at a $3 per barrel reduction and $328.8 million at a $4 reduction.