Nigeria does not have enough available crude oil to meet the full requirements of the Dangote Petroleum Refinery, Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele has said.
Oyedele disclosed this during an interview on Channels Television’s Politics Today, where he argued that expanding local refining alone would not guarantee lower petrol prices.
He said Nigeria’s crude production does not translate into an equivalent volume available to domestic refineries because of production costs, royalties and contractual obligations with oil companies.
“Today we do not have up to 700,000 barrels of free crude to give anyone, including Dangote,” he said, referring to the refinery’s capacity of 700,000 barrels per day.
According to Oyedele, Nigeria produces about 1.8 million barrels of crude oil and condensates daily, but only a portion is available to the government after accounting for existing obligations.
He said increased production, reduced oil theft and renegotiated crude commitments had helped free up additional volumes, although Nigeria could not yet meet the refinery’s entire crude requirement.
Oyedele also noted that Dangote Refinery needed to import some heavier crude grades to optimise production despite Nigeria’s supply of lighter, sweeter crude.
The minister rejected arguments that local refining would automatically bring petrol prices down to between ₦400 and ₦500 per litre, saying crude oil, refining, freight, insurance and financing all contribute to the final cost.
He warned that supplying crude to refiners below market value would reduce government revenue and distort the domestic market.
Oyedele said Nigeria’s petrol consumption was close to 50 million litres daily, with local refining and imports accounting for varying proportions of supply.
He added that Dangote Refinery supplied as much as 70 per cent of domestic consumption in some months, while imports made up the shortfall.
The minister said Nigeria had moved from importing all its petrol before Dangote Refinery began operations to producing a significant proportion locally. He also noted that the private refinery could export some of its output while the country continued to import products to meet domestic demand.
Oyedele reiterated the Federal Government’s opposition to restoring petrol subsidies, warning that the policy would place additional pressure on public finances.
At a press briefing on Thursday, he estimated that restoring subsidies to pre-reform levels would cost more than ₦20 trillion annually. He also warned that the naira could weaken to ₦3,000 per dollar within months, potentially pushing petrol prices to at least ₦2,000 per litre.
The minister’s projections followed renewed calls for government intervention as rising fuel prices continue to pressure households and businesses.