Nigeria’s crude oil and condensate production remained below the benchmark for the 2026 budget in August, despite a marginal 0.4 per cent increase in output during the month.
However, the presidential candidate of the Peoples Redemption Party (PRP), Donald Duke, said Nigeria should supply crude oil for domestic
refining at its production cost, rather than its international market price. The former Cross River State governor said, with this, the proceeds from diesel, aviation fuel, kerosene and other by-products would reduce the cost of petrol.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that the country produced an average of 1.68 million barrels per day (mbpd) of crude oil and condensates in August, from 1.67mbpd recorded in July.
The latest performance means Nigeria has continued to struggle to raise production to the level required to fully support the revenue assumptions in the 2026 budget, with output remaining largely stagnant around 1.6mbpd.
Although Nigeria is enjoying the windfall of the United States (U.S.)-Iran war, with oil prices hovering at $105 per barrel yesterday, the 2026 budget assumed a production of 1.84mbpd. The NUPRC data showed that combined crude oil and condensate production stood at 1.56mbpd in March, rising to 1.66mbpd in April and 1.7mbpd in May. Production peaked at 1.74mbpd in June before falling to 1.67mbpd in July and edging up to 1.68mbpd in August.
Despite the increase, the August figure remained significantly below the budget benchmark, an indication that the oil sector continues to face persistent challenge of translating recent regulatory and operational interventions into sustained production growth.
In crude oil terms, excluding condensates, Nigeria produced 1.5mbpd in August, meeting its Organisation of the Petroleum Exporting Countries (OPEC) quota for the fourth consecutive month.
NUPRC said the lowest combined daily production during the month was 1.64mbpd, while the highest was 1.71mbpd.
Bonny Terminal recorded the highest average production among the major terminals and streams, with 320,040bpd, followed closely by Forcados Terminal with 317,400bpd. Qua Iboe Terminal accounted for 171,720bpd of crude oil and condensates, while Escravos Oil Terminal recorded 131,710bpd. Bonga ranked fifth, with an average production of 92,500bpd of crude oil.
The upstream regulator attributed the modest improvement in August to the resolution of operational challenges involving the Single Buoy Mooring at the Erha field, which had affected production and evacuation activities in the previous month.
According to the commission, restoration of normal evacuation and production operations at the asset contributed positively to overall industry output.
It added that production activities across most other producing assets remained relatively stable, with operators implementing measures to improve production efficiency, maintain asset integrity and minimise disruptions.
The persistent production shortfall is significant for government finances because crude oil output remains a major determinant of Nigeria’s foreign exchange earnings and public revenue at a time when the country needs to pay back crude backed loans.
Although meeting the OPEC quota represents an improvement in regulatory compliance, the country’s inability to sustain production significantly above 1.6mbpd points to continuing structural constraints across the upstream sector.
NUPRC said stakeholders remained focused on improving asset reliability, operational
resilience and intervention programmes to support sustained production growth.
It also stressed the need for timely resolution of operational constraints, effective asset management and stronger collaboration among industry stakeholders to safeguard Nigeria’s production capacity.
DUKE spoke during an interview weekend in Abuja against the backdrop of renewed controversy over former Vice President Atiku Abubakar’s declaration that he would restore petrol subsidy if elected president in 2027.
“I don’t believe there is a subsidy. I have said it at several forums. This oil is our own. It belongs to all of us. It is our commonwealth. Don’t look at the price of the oil in the international market,” he said.
He stated further that Nigeria requires about 300,000 barrels of crude oil daily for domestic consumption out of its estimated production of 1.7 million barrels, leaving the balance available for commercial export.
The former governor of oil-rich Cross River argued that the crude allocated for domestic
refining should be priced based on the cost of producing it.
“While we sell oil at $70 or $80 a barrel, the cost of production may not exceed $40 a barrel. That crude oil has about seven by-products,” he stated.
Duke added that petrol represented only one of the products derived from crude oil and should not be made to bear the entire cost of the barrel.
An analysis credited to Ekpenyong Eyo illustrates Duke’s argument by estimating that a barrel of crude produces about 55 litres of petrol alongside diesel, aviation fuel, liquefied petroleum gas, naphtha and other products.
Using assumed market prices, the analysis puts the combined revenue from the other products at about N136,350 from a barrel purchased for N150,000. It estimates that petrol would be left to recover only N13,650 of the crude cost, translating to about N248 per litre before refining, distribution and marketing expenses.
The calculation is illustrative, as actual refinery yields, production costs and product prices vary. Duke’s central argument, however, is that the revenue from all products obtained from a barrel should be considered when determining the domestic price of petrol.
Presidential candidate of Nigeria Democratic Congress (NDC), Peter Obi, supports ending the old subsidy arrangement, but maintains that it should have been removed gradually and that the savings should have been invested in programmes that directly improve citizens’ welfare.
