The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has said Nigeria does not have enough freely available crude oil to meet the supply needs of the Dangote Refinery and other domestic refiners.

Oyedele attributed the shortfall to Nigeria’s crude oil production constraints, production costs, royalties and contractual obligations with oil companies, which reduce the volume available to the Federal Government.

The minister spoke on Friday during an interview on Channels Television’s Politics Today, amid renewed calls for government intervention in the petroleum sector and proposals for a production subsidy to support domestic refineries.

“ So the people that are saying, ‘We’ll discount it, we’ll do the cost of production,’ don’t know what they’re talking about. We don’t have enough to service Dangote. Dangote imports crude. And I just want us to establish that fact,” Oyedele said.

He explained that although Nigeria produces about 1.8 million barrels of crude oil daily, the entire volume does not belong to the government because of production-sharing contracts and joint ventures with oil companies.

“Under the production-sharing contract and joint venture, they share these things. And the ratios vary. Let’s say roughly 45, 55, right? You do that,” he said.

According to Oyedele, the government’s share is further reduced by production costs and royalties before the remaining crude oil can be allocated.

“Then there’s the cost. To produce it, to get it out of the ground, you take it in the cost of oil. That’s also barrels that are going away. Then you take the one for royalty. Before you now start talking about profit oil that you share,” he said.

He added that Nigeria currently has less than 700,000 barrels of crude oil freely available for allocation to buyers, including the Dangote Refinery.

“I don’t want to go into the technicalities, but the reality is that today we do not have up to 700,000 free crude to give anyone, including Dangote,” the minister said.

Oyedele maintained that the naira-for-crude policy introduced by President Bola Tinubu’s administration had helped stabilise the domestic petroleum market, although the available crude volumes remained insufficient to meet demand.

“That’s why when Mr President introduced the Naira for Crude, it was meant to help us gain some stability. And it has worked, but we don’t have enough quantity to give as of yet,” he said.

The minister expressed optimism that increased crude oil production would enable Nigeria to meet the feedstock requirements of the Dangote Refinery and other local processors.

“As we ramp up production and we free up some barrels, we’ll get to a point where we’ll be able to give Dangote everything he wants and other refiners will be able to get enough,” he said.

Oyedele also expressed hope that Nigeria would eventually refine all the crude oil it produces locally and export only refined petroleum products.

“I even hope personally that we get to a point in Nigeria where all the crude we produce will be refined in Nigeria and we only export refined products,” he said.

The debate over domestic crude oil supply comes amid renewed calls for the return of petrol subsidies following rising fuel prices and mounting economic pressures associated with the Tinubu administration’s reforms.

The Federal Government recently announced a 30-day petrol discount at outlets operated by the Nigerian National Petroleum Company Limited (NNPCL). 

The initiative attracted criticism from opposition politicians and other Nigerians, who questioned whether it amounted to a return of fuel subsidy through another channel.

Tinubu removed the petrol subsidy in 2023 as part of his administration’s economic reforms, arguing that the policy had become fiscally unsustainable. The removal, alongside changes to the foreign exchange market, has contributed to higher living costs, while the government has maintained that the reforms were necessary to avert a deeper economic crisis.

Nigeria remains a major crude oil producer and is home to the Dangote Refinery, owned by businessman Aliko Dangote. However, Oyedele’s remarks highlight the gap between the country’s crude oil production and the volume available to meet the needs of domestic refiners.