- Finance Minister Taiwo Oyedele says production-sharing contracts, production costs and existing commitments limit Nigeria’s ability to supply the Dangote refinery’s full crude requirements.
- Dangote refinery plans to double its crude-distillation capacity from 700,000 to 1.4 million barrels per day, increasing the need for reliable domestic and international crude supplies.
Nigeria’s Finance Minister, Taiwo Oyedele, has acknowledged that the country cannot currently supply enough crude oil to meet the full requirements of the Dangote refinery, highlighting a significant challenge as the facility prepares to double its processing capacity to 1.4 million barrels per day.
Speaking on Channels Television’s Politics Today programme on October 9, 2026, Oyedele explained that production-sharing arrangements, operational costs, and existing government commitments limit the volume of crude oil available to domestic refiners.
“We don’t have enough to service Dangote,” Oyedele said, emphasising the gap between Nigeria’s total crude oil production and the volume the government can allocate to local refineries.
Nigeria’s crude oil production does not automatically translate into sufficient government-owned barrels for domestic refining. Production-sharing contracts and joint ventures require the government to account for commercial partners’ entitlements, production costs and royalties before determining its available share.
Oyedele also identified previous borrowing arrangements secured against future crude oil production as another constraint on supply. The government has renegotiated some commitments and intensified efforts to reduce oil theft to free up additional barrels, but these measures have not eliminated the shortfall.
The minister did not disclose the exact volume of crude oil currently available for allocation to the Dangote refinery or quantify the refinery’s supply deficit.
The Dangote refinery continues to source crude oil from international markets to complement domestic supplies. Its sourcing strategy also reflects the technical requirements of refining, as different crude grades produce different yields and influence processing costs.
Oyedele noted that the refinery would still require heavier crude grades even if Nigeria could supply sufficient volumes of its domestic sweet crude. This means that international sourcing serves both supply-security and operational-efficiency objectives.
The refinery’s prospectus disclosed that the facility had processed 36 crude grades from Africa, South America, the United States and the Middle East as of June 30, 2026. However, the company warned that its supply arrangements could not guarantee uninterrupted deliveries, making crude availability a material risk to operations and expansion plans.
The Dangote refinery currently operates with crude-distillation capacity of 700,000 barrels per day and plans to expand that capacity to 1.4 million barrels per day.
The proposed expansion would strengthen the refinery’s potential role in supplying petroleum products to Nigeria and export markets across Africa. However, the larger processing capacity would also increase the importance of securing dependable crude supplies from domestic producers and international suppliers.
The expansion therefore places greater emphasis on long-term supply arrangements, diversified sourcing and the availability of crude grades suited to the refinery’s processing requirements.
Nigeria introduced a domestic crude oil sales arrangement in October 2024 to support local refining and reduce pressure on foreign exchange. The initiative sought to change the payment mechanism for qualifying crude purchases by enabling transactions in local currency.
Oyedele said the arrangement had improved stability but stressed that payment reforms alone could not create additional crude oil supplies. The government must also address production constraints, existing contractual obligations and the volume of oil available for domestic allocation.
The minister’s remarks highlight the distinction between increasing national crude production and ensuring that sufficient volumes reach domestic refineries. For Nigeria’s refining ambitions, the availability, ownership and allocation of crude oil remain as important as production growth.
The supply challenge also underscores the need for coordination among the Federal Government, oil producers and domestic refiners to support reliable feedstock deliveries as refining capacity expands.