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Nigeria’s limited crude oil supply is preventing the country from fully meeting the needs of domestic refineries, including the Dangote Refinery, despite the removal of petrol subsidy in 2023, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said.
Oyedele explained that although Nigeria produces about 1.8 million barrels of crude oil daily, a significant portion is committed to oil companies under production-sharing contracts and joint venture agreements. He noted that production expenses and royalty payments further reduce the quantity available to the Federal Government.
The minister disclosed that the volume of crude oil freely available for allocation to buyers was below 700,000 barrels daily. He said this shortage had made it difficult for the government to supply enough crude to the Dangote Refinery and other local processors, forcing the major refinery to source part of its crude requirements from abroad.
Speaking during an interview on Channels Television’s Politics Today, Oyedele said the naira-for-crude arrangement introduced by President Bola Tinubu had helped stabilise the domestic petroleum market. However, he acknowledged that the initiative remained constrained by the country’s limited supply and could not yet meet the full requirements of local refiners.
He expressed optimism that increased crude oil production would improve the situation, allowing the government to allocate more barrels to domestic refineries. Oyedele said his long-term objective was for Nigeria to process all its crude oil locally and export refined petroleum products rather than raw crude, as the country continues to pursue reforms in the oil and gas sector.
