Why Dangote Refinery Lacks Enough Crude Oil – Presidency – Daily Trust

The Federal Government has attributed the persistent scarcity of crude oil on the Dangote Refinery to Nigeria’s earlier ahead gross sales of crude.

It acknowledged that the nation remains to be grappling with the results of promoting a part of its oil manufacturing upfront.

Sunday Dare, Special Adviser to President Bola Ahmed Tinubu on Media and Public Communications, mentioned the advance gross sales had restricted the amount of crude accessible for home refining.

This is regardless of elevated nationwide manufacturing underneath the present administration.

Dare, who spoke on Trust TV’s 30 Minutes programme with Mannir Dan-Ali, nevertheless, admitted that he didn’t have the precise figures for the amount of crude oil offered forward of time.

“Why is it not getting enough? It is because part of our oil production has been sold ahead of time,” he mentioned.

He defined why the privately owned refinery continued to expertise provide difficulties regardless of the federal government’s efforts to assist native refining.

His remarks come amid persevering with disagreements over the implementation of the Federal Government’s naira-for-crude coverage.

Introduced in 2024, the coverage was made to allow home refineries to buy crude oil in naira and provide petroleum merchandise to the native market in the identical foreign money.

The association was supposed to ease strain on international trade, scale back the price of importing refined petroleum merchandise and strengthen home refining capability.

However, the Dangote Refinery has repeatedly complained that the amount of crude provided underneath the initiative falls in need of its necessities.

It mentioned the state of affairs compelled it to supply extra provides from worldwide markets.

In March 2026, the refinery’s Chief Executive Officer, David Bird, mentioned it was receiving solely 5 cargoes month-to-month underneath the association, towards the 13 to fifteen cargoes it required.

The dispute persevered in July, when the refinery mentioned it was receiving about 4 million barrels month-to-month underneath the naira-for-crude association.

This is in contrast with roughly 13 million barrels envisaged underneath the initiative.

The Nigerian National Petroleum Company Limited, nevertheless, maintained that it had allotted all accessible crude cargoes underneath the association to the refinery.

It argued that precise deliveries have been influenced by crude availability, nomination schedules and operational necessities.

The provide dispute has additionally had implications for the refinery’s international trade necessities.

In July, the corporate started pricing some domestically offered petroleum merchandise in {dollars}, citing difficulties in securing ample crude provides by the naira-for-crude programme.

Dare mentioned the Tinubu administration had launched measures to enhance home refining, together with the naira-for-crude coverage, which he mentioned helped handle the refinery’s difficulties in acquiring international trade.

He argued that the coverage was proof of the President’s willingness to intervene to assist native refining, regardless of the challenges related to crude availability.

“Without the crude oil it needs, that refinery cannot operate,” he mentioned.

The presidential aide additionally defended the federal government’s function within the institution of the refinery.

He argued that federal assist and the coverage surroundings underneath Tinubu have been vital to its improvement.

He mentioned the Federal Government had made substantial monetary commitments to the venture and that the refinery would have confronted difficulties with out entry to international trade.

However, he acknowledged that the ability nonetheless wanted authorities assist to safe ample crude provides.

Dare’s clarification comes towards the backdrop of the federal government’s broader argument that elevated home refining is important to decreasing Nigeria’s dependence on imported petrol, diesel and different petroleum merchandise.

Nigeria has traditionally exported a lot of its crude oil whereas importing important volumes of refined merchandise, exposing the nation to worldwide costs, international trade pressures and provide disruptions.

The Dangote Refinery, designed with a capability of 650,000 barrels per day when initially commissioned and subsequently expanded, was anticipated to vary that sample by processing crude domestically and supplying the home and export markets.

The refinery’s present put in capability has since been reported at about 700,000 barrels per day.

But the provision of crude stays a central situation in figuring out how a lot of that capability will be sustained with Nigerian feedstock.

In a separate interview on October 9, Finance Minister Taiwo Oyedele mentioned Nigeria didn’t have sufficient crude oil accessible to fulfill the Dangote Refinery’s necessities and people of different home refiners.

Oyedele defined that whole nationwide manufacturing couldn’t be equated with the amount accessible to the Federal Government.

He mentioned it’s because parts of the crude have been allotted to traders and companions underneath production-sharing contracts and joint ventures, whereas different deductions lined manufacturing prices and royalties.

He mentioned Nigeria didn’t have as much as 700,000 barrels of uncommitted crude oil accessible to provide refiners, including that elevated manufacturing can be needed to fulfill their necessities.

Dare, in the meantime, mentioned Nigeria’s every day crude manufacturing had elevated from between 800,000 and 900,000 barrels when Tinubu assumed workplace in May 2023 to between 1.7 million and 1.8 million barrels.

He attributed the rise partly to improved pipeline safety, arguing that the nation had made substantial progress in defending its oil infrastructure and boosting output.

However, he didn’t present the precise quantity of crude offered upfront when requested through the interview.

The unresolved provide problem highlights the difficulties dealing with the federal government’s drive to develop native refining, even because it factors to rising manufacturing and coverage interventions as proof of progress within the oil sector.