The Federal Government has addressed growing calls for crude oil production subsidies, revealing that Nigeria currently lacks sufficient crude oil reserves to fully meet the operational demands of the Dangote Refinery.

 

Speaking during an appearance on Channels Television, the Minister of Finance, Taiwo Oyedele, clarified the realities of Nigeria's oil output and explained why the refinery still relies on imported crude.

 

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### "We Don't Have Enough to Service Dangote"

 

Addressing suggestions that the government should supply crude oil at a discounted cost of production, Oyedele stated plainly that critics pushing for such subsidies misunderstand the structural realities of Nigeria's oil sector.

 

> *"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 explained.

 

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### Where Does Nigeria’s 1.8 Million Barrels Go?

 

While Nigeria currently produces around **1.8 million barrels of crude oil per day**, the Minister highlighted that the entire output does not belong solely to the nation.

 

Under existing **Joint Ventures (JVs)** and **Production Sharing Contracts (PSCs)**, crude production is divided among several obligations:

 

* **Production Costs:** A portion of the harvested crude ("cost oil") goes directly toward covering operational expenses.

* **Royalties & Equity Splits:** The remaining crude is split between international oil partners and the state, with ratios hovering around 45/55 depending on the contract.

* **Subsidy Commitments:** A large portion of Nigeria’s net share has historically been used to sustain domestic fuel requirements.

 

When asked how much crude oil Nigeria actually retains as "free crude" after these mandatory deductions, Oyedele revealed:

 

> *"The reality is that today we do not have up to 700,000 free crude to give anyone, including Dangote."*

 

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### The Vision: Refining All Crude Locally

 

Despite current constraints, the Minister noted that initiatives like the President’s **Naira-for-Crude** deal have brought short-term stability to the market. However, long-term relief hinges entirely on ramping up national production.

 

As production increases and more barrels are freed up, the government plans to supply Dangote and other domestic refiners with their full required capacity.

 

> *"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. 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,"* Oyedele added.