The Federal Government has said it does not have enough crude oil to supply Dangote Refinery.
His statement follows calls for a “production subsidy” to the Dangote Refinery to meet local demand for refined products.
“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 1.8 million barrels of crude oil daily, “that does not belong to Nigeria alone.”
“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
“Then there’s the cost. To produce it, to get it out of the ground, you take it in the cost of oil. That’s also barrels that are going away. Then you take the one for royalty. Before you now start talking about profit oil that you share. The long and short of what I’m telling you is that whatever is left for Nigeria, we have sustained it almost entirely because of fuel subsidy,” he said.
When asked about the quantity of crude oil Nigeria has after these deductions, Oyedele said, “I don’t want to go into the technicalities, but the reality is that today we do not have up to 700,000 free crude to give anyone, including Dangote.”
“That’s why when Mr President introduced the Naira for Crude, it was meant to help us gain some stability. And it has worked, but we don’t have enough quantity to give as of yet,” he added.
According to him, as the country ramps up crude oil production, Nigeria will be able to supply Dangote and other refiners with enough barrels.
“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,” the former chairman of the Presidential Committee on Fiscal Policy and Tax Reforms said.
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