The Minister of Finance and Coordinating Minister of Economy, Taiwo Oyedele, has said Nigeria’s crude oil production constraints remain a major challenge to meeting domestic refining needs, despite President Bola Tinubu’s decision to remove the petrol subsidy in 2023.
Oyedele said the country did not have enough freely available crude oil to supply the Dangote Refinery and other local refiners, explaining that production costs, royalties and contractual obligations significantly reduced 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 currently 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 the minister, the government’s share is further reduced by production costs and royalties before the remaining crude can be allocated.
