The Presidency has attributed the Dangote Refinery’s difficulty in securing sufficient Nigerian crude oil to the country’s previous commitments to sell part of its production in advance, saying the arrangement has reduced the volume available for domestic refineries despite an increase in national output.
Sunday Dare, Special Adviser to President Bola Ahmed Tinubu on Media and Public Communications, disclosed this during an interview on Trust TV’s 30 Minutes programme with Mannir Dan-Ali. He acknowledged that he could not provide the exact quantity of crude sold ahead of time but maintained that the commitments had constrained supplies to the privately owned refinery.
“Why is it not getting enough? It is because part of our oil production has been sold ahead of time,” Dare said.
His explanation comes amid persistent disagreements over the implementation of the Federal Government’s naira-for-crude policy, which was introduced in 2024 to enable domestic refineries to purchase crude oil in naira and sell refined petroleum products locally in the same currency.
The initiative was designed to reduce pressure on foreign exchange, lower the cost of importing refined petroleum products and strengthen local refining. However, the Dangote Refinery has repeatedly complained that the crude volumes supplied under the arrangement fall short of its requirements, forcing it to seek additional supplies from international markets.
In March 2026, the refinery’s Chief Executive Officer, David Bird, said the facility received only five crude cargoes monthly under the arrangement, against the 13 to 15 cargoes it required.
By July, the refinery said it was receiving approximately four million barrels monthly through the programme, compared with about 13 million barrels envisaged under the initiative.
The Nigerian National Petroleum Company Limited (NNPCL), however, maintained that it had allocated all available crude cargoes under the arrangement to the refinery. The company attributed the gap between allocations and actual deliveries to crude availability, nomination schedules and operational requirements.
The supply difficulties also affected the refinery’s foreign exchange arrangements. In July, the company began pricing some petroleum products sold locally in dollars, citing challenges in obtaining sufficient crude through the naira-for-crude programme.
Dare defended the Tinubu administration’s intervention, arguing that the policy had helped address some of the refinery’s foreign exchange difficulties and demonstrated the government’s commitment to supporting domestic refining.
“Without the crude oil it needs, that refinery cannot operate,” he said.
The presidential aide also defended the Federal Government’s role in the development of the facility, arguing that government support and the policy environment under Tinubu had been important to the project. He said the government had made substantial financial commitments and that the refinery would have faced difficulties without access to foreign exchange.
Despite these interventions, he acknowledged that the facility still required government support to secure adequate crude supplies.
The Presidency’s explanation comes alongside concerns raised by Finance Minister Taiwo Oyedele over Nigeria’s capacity to meet the feedstock requirements of the Dangote Refinery and other domestic refiners.
Speaking in a separate interview on October 9, Oyedele said the country did not have sufficient crude available to meet the refinery’s requirements and those of other local processors.
He explained that Nigeria’s total crude production should not be confused with the volume available to the Federal Government for allocation. According to him, portions of production are committed to investors and partners under production-sharing contracts and joint ventures, while other deductions cover production costs and royalties.
Oyedele said Nigeria did not have up to 700,000 barrels of uncommitted crude oil available for domestic refineries, adding that increased production would be necessary to meet their requirements.
Dare, meanwhile, said daily crude oil production had risen from between 800,000 and 900,000 barrels when Tinubu assumed office in May 2023 to between 1.7 million and 1.8 million barrels.
He attributed the increase partly to improved security around pipelines and other oil infrastructure, arguing that measures to curb disruptions had helped boost national output.
However, the increase in production has not eliminated the supply difficulties facing the Dangote Refinery, with the Presidency’s explanation pointing to advance sales as one of the constraints on the quantity of crude available for domestic processing.
Nigeria has traditionally exported crude oil while importing substantial volumes of refined petroleum products, leaving the country exposed to international price movements, foreign exchange pressures and supply disruptions.
The Dangote Refinery, initially commissioned with a designed capacity of 650,000 barrels per day and subsequently expanded, was expected to reduce that dependence by processing crude locally for domestic consumption and export. Its installed capacity has since been reported at approximately 700,000 barrels per day.
However, the volume of Nigerian crude available to the facility remains a key factor in determining how consistently it can operate using domestic feedstock.
The continuing supply dispute highlights the challenge of aligning rising national production with the crude requirements of local refineries, particularly where existing contractual commitments and advance sales limit the volume available for domestic allocation.