Subsidy removal exposed Nigeria’s crude shortfall — Oyedele

Nigeria’s Minister of Finance, Taiwo Oyedele, has underscored that the country’s crude oil production constraints continue to pose a significant challenge to meeting domestic refining needs, despite the removal of the petrol subsidy in 2023 by President Bola Tinubu. Oyedele revealed that the nation lacks sufficient freely available crude oil to supply the Dangote Refinery and other local refiners, citing production costs, royalties, and contractual obligations as key factors reducing the government’s share of crude oil.

During an interview on Channels Television’s Politics Today, Oyedele emphasized that Nigeria produces around 1.8 million barrels of crude oil daily, but the government only receives a portion of this output due to production-sharing contracts and joint ventures with foreign oil companies. He explained further that additional deductions for production costs and royalties further diminish the available crude for allocation.

Oyedele highlighted that only approximately 700,000 barrels of crude are currently available for any buyer, including the Dangote Refinery. He stated that while the Naira-for-Crude policy introduced by the Tinubu administration has provided stability, the current volume remains insufficient to satisfy domestic demand. Oyedele expressed optimism that increased crude oil production will eventually enable Nigeria to meet the feedstock requirements of refineries, aiming for a future where all domestically produced crude is refined locally and only refined products are exported.