Nigeria does not yet have enough uncommitted crude oil to meet the full feedstock requirements of the Dangote Petroleum Refinery, despite an increase in national oil production, Minister of Finance and Coordinating Minister of the Economy Taiwo Oyedele has said.
Speaking on Channels Television’s Politics Today on October 9, 2026, Oyedele explained that much of Nigeria’s crude oil production is tied to contractual obligations with international oil companies, leaving insufficient freely available volumes to supply the refinery’s estimated requirement of about 700,000 barrels per day.
Key Highlights
- Finance Minister Taiwo Oyedele says Nigeria lacks enough uncommitted crude oil to fully supply the Dangote Refinery.
- Nigeria produces around 1.8 million barrels of oil per day, but much of the output is subject to contractual obligations.
- The Dangote Refinery requires approximately 650,000–700,000 barrels of crude oil daily at its stated capacity.
- Oyedele says the refinery continues to import crude oil to meet its feedstock requirements.
- Nigeria’s naira-for-crude arrangement has supported domestic refining, but available supply remains limited.
- The Dangote Refinery has reduced Nigeria’s reliance on imported petrol and diesel while exporting some refined products.
- The government expects increased domestic oil production to improve crude availability for local refineries.
Nigeria Cannot Yet Supply Dangote Refinery’s Full Crude Requirements
Oyedele said Nigeria had not reached the production and allocation levels needed to supply the Dangote Refinery with its full daily crude requirement.
“We don’t have enough to service Dangote. Dangote imports crude,” the minister said, addressing calls for discounted crude supplies or other forms of production support for domestic refiners.
According to him, although Nigeria produces approximately 1.8 million barrels of oil daily, a substantial portion is committed to production-sharing contracts, joint ventures and other obligations involving international oil companies.
These arrangements limit the volume of crude available for discretionary government allocation after contractual entitlements and other commitments have been accounted for.
Oyedele said Nigeria was therefore not yet in a position to consistently allocate 700,000 barrels per day to the Dangote Refinery.
Rising Oil Production Has Not Eliminated Supply Constraints
Nigeria’s crude oil production has improved following increased drilling activity and efforts to strengthen cooperation across the upstream petroleum sector.
NNPC Limited has reported production of approximately 1.821 million barrels per day, including condensates, according to figures cited in recent reports.
The recovery has been supported by increased drilling operations, improved infrastructure and efforts to address production disruptions.
Nigeria has also recorded months in which its crude output met or exceeded its OPEC production quota. However, higher production does not automatically mean that all additional barrels are available for domestic refining.
Contractual obligations, royalties, export commitments and the commercial arrangements governing oil production affect how much crude can be allocated to local refineries.
The distinction between total national output and uncommitted crude remains central to the debate over whether Nigeria can fully meet the feedstock requirements of its growing refining industry.
Dangote Refinery Continues to Import Crude Oil
The Dangote Petroleum Refinery, located in the Lekki Free Zone in Lagos, has a stated processing capacity of approximately 650,000 to 700,000 barrels per day, making it one of the largest single-train refineries in the world.
Despite its access to Nigerian crude, the refinery has continued to diversify its supply sources by importing oil grades from other African producers, including Libya.
The imports help the facility maintain operations when locally available crude volumes or particular grades do not fully meet its requirements.
Nigeria’s Domestic Crude Supply Obligation is intended to support local refining by requiring crude producers to make supplies available to domestic refiners under the applicable framework. However, the volume offered, commercial terms and actual deliveries remain important factors in determining how much crude reaches individual facilities.
NNPC has continued supplying crude under the naira-for-crude arrangement, while additional volumes may be sold through dollar-denominated transactions.
Oyedele’s remarks highlight the gap between Nigeria’s ambition to refine more crude domestically and the practical limitations imposed by current production and allocation arrangements.
Dangote Refinery Expands Domestic Petrol Supply
The refinery has made significant progress in supplying petroleum products to the Nigerian market, helping reduce reliance on imported refined fuels.
According to figures reported for August 2026, the facility processed an average of 736,470 barrels per day, equivalent to approximately 105 per cent of its stated 700,000-barrel capacity benchmark.
The same reports indicated that the refinery supplied about 71 per cent of Nigeria’s domestic petrol consumption, averaging roughly 35.87 million litres daily during the period.
Its operations have also been associated with reductions in petrol imports and a substantial decline in diesel imports, although the figures reflect reported performance for that particular month rather than a permanent level of output.
The refinery has additionally exported refined petroleum products, creating another source of potential foreign-exchange earnings.
These developments have strengthened expectations that domestic refining can reduce Nigeria’s exposure to international refined-product supply disruptions. However, maintaining high utilisation depends partly on reliable access to suitable crude oil.
Read also:
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Naira-for-Crude Deal Supports Domestic Refining
The naira-for-crude arrangement introduced under President Bola Tinubu was designed to facilitate domestic refining by allowing participating refineries to purchase eligible Nigerian crude in naira rather than relying entirely on dollar transactions.
Oyedele said the arrangement had helped provide some stability in the market, but acknowledged that the volume of crude available remained insufficient to meet the Dangote Refinery’s entire daily requirement.
The arrangement addresses the currency and commercial dimensions of crude purchases, but it does not independently increase national oil production or remove existing contractual obligations.
As a result, even with the framework in place, refiners may still need to source crude internationally when domestic supplies are inadequate or unsuitable for their operational needs.
The debate over crude allocation therefore involves both the availability of oil and the commercial terms under which it is supplied.
Government Targets Higher Oil Production
Oyedele expressed optimism that sustained increases in crude oil production would eventually enable Nigeria to supply more crude to Dangote and other domestic refiners.
The government’s longer-term ambition includes raising production towards three million barrels per day, although achieving that level would depend on investment, infrastructure, security, operational efficiency and the management of production-related challenges.
Higher output could expand the pool of crude available for domestic refining after existing contractual obligations have been met.
However, the impact would also depend on how additional production is allocated between exports, contractual commitments and local processing.
For Nigeria, the policy challenge is to increase production while ensuring that the upstream petroleum sector can support domestic refining without undermining existing commercial obligations.
Crude Supply Remains Central to Nigeria’s Energy Security
Oyedele’s comments come amid broader discussions about fuel prices, domestic refining, the removal of petrol subsidies in 2023 and efforts to strengthen Nigeria’s energy security.
The Dangote Refinery has expanded domestic processing capacity and reduced the country’s dependence on imported refined products. Nevertheless, continued crude imports demonstrate that greater refining capacity does not automatically translate into complete self-sufficiency in feedstock supply.
The balance between crude production, contractual commitments, export earnings and domestic refinery requirements is expected to remain a major policy issue as Nigeria seeks to increase output.
For now, the finance minister’s position is that rising production has not yet provided enough uncommitted crude to supply the Dangote Refinery fully, with future improvements depending on sustained increases in national output and the availability of additional barrels for local processing.
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