By TheDailyNewsHub Reporter
Nigeria is not yet producing enough crude oil to meet the Dangote Petroleum Refinery’s full daily requirement of 700,000 barrels, Finance Minister Taiwo Oyedele has said, highlighting a supply challenge facing the country as it seeks to expand domestic refining and reduce dependence on imported petroleum products.
Oyedele made the remarks during an interview with Channels Television, explaining that Nigeria’s current crude oil production does not leave sufficient volumes to meet the refinery’s entire requirement.
“We are still not at the point where we can give Dangote Refinery 700,000 barrels of crude oil; we don’t have enough to service Dangote Refinery,” the minister said.
His comments come as the Federal Government and oil industry regulators pursue higher production levels to improve government revenue and ensure more reliable crude supply to local refineries.
The Dangote refinery, located in the Lekki Free Zone in Lagos State, has a processing capacity reported at around 700,000 barrels per day following performance tests that took output above its original nameplate capacity of 650,000 barrels per day. Its demand for crude is substantial relative to Nigeria’s current production, particularly when the country’s other domestic refiners and export commitments are taken into account.
Nigeria’s National Petroleum Company Limited reported on October 8 that national production had risen to 1.821 million barrels per day, including condensates, in the preceding month. The announcement was made at the 2026 Association of Energy Correspondents of Nigeria conference in Lagos.
The production figure represents an improvement for the oil sector, but it should not be confused with the quantity of crude oil available for delivery to the Dangote refinery. The national total includes condensates, while crude production is distributed among different commercial arrangements, domestic requirements and export commitments.
The gap between total production and available supply is central to the debate over how much Nigerian crude can be directed to local refineries without disrupting other obligations.
Nigeria operates a Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act. The framework requires oil producers to make crude available to licensed domestic refineries, with allocations administered by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
However, the system does not mean every barrel allocated or offered to a refinery is automatically delivered. Transactions are governed by commercial arrangements, including the law’s willing-buyer, willing-seller principle, and actual deliveries depend on the volumes refiners accept and purchase.
Figures reported by Channels Television from the NUPRC’s second-quarter 2026 data illustrate the distinction. Producers offered the Dangote refinery 68.1 million barrels during the quarter against a stated requirement of 63 million barrels. The refinery accepted 52.6 million barrels, while total supplies to all domestic refiners stood at 53.7 million barrels.
The figures show that the volume offered to Dangote exceeded its stated requirement, but the quantity ultimately accepted was lower. They also indicate why claims about crude shortages need to distinguish between national production, allocations, offers, purchases and actual deliveries.
Oyedele’s comments point to the wider production challenge. Even with improved output, Nigeria must balance the refinery’s demand against the needs of other local operators and the crude volumes committed through existing commercial arrangements. The precise supply available to any individual refinery can therefore differ from the country’s headline production figure.
The issue has economic implications. The Dangote refinery was developed to process crude at scale and supply petrol, diesel, aviation fuel and other products to Nigeria and export markets. A dependable supply of Nigerian crude could reduce exposure to international feedstock purchases, although the refinery can also source suitable crude grades from abroad.
Dangote Refinery’s managing director, David Bird, said in January that between 30 and 40 per cent of its crude feedstock was being obtained through the Federal Government’s naira-for-crude arrangement, while other supplies came from the spot market and international sources. The company has said it remains interested in increasing the volume it obtains through the programme.
The naira-for-crude policy was introduced to allow participating domestic refineries to buy crude from NNPC in naira rather than dollars. It was intended to support local refining and reduce some foreign-exchange pressures associated with crude purchases and petroleum-product supply.
But the arrangement cannot by itself resolve a physical production shortfall. If Nigeria’s output remains below the combined volumes required for domestic processing, exports and other commitments, the government and producers must still determine how available crude is allocated and sold.
The Federal Government has set higher production ambitions, while petroleum officials have pointed to increased drilling activity and efforts to remove operational bottlenecks as part of the recovery in output. Sustaining that growth will be important if Nigeria is to meet more of its domestic refining needs while retaining the revenue earned from crude exports.
The latest production figures were reported in TheDailyNewsHub’s earlier coverage, Crude Oil Production Has Risen To 1.8mb/d — Ojulari.
Oyedele’s remarks underline the difference between having a large refining facility and producing enough crude to supply it fully. For Nigeria, increasing output, improving delivery arrangements and balancing domestic demand with existing obligations remain central to the country’s ambition to strengthen local refining and capture more value from its petroleum resources.