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Oyedele: Nigeria’s 1.8 Million Barrels a Day Is Not All the Government’s to Give
Nigeria’s production headline is about 1.8 million barrels of crude a day, but the Finance Minister says that number tells only part of the story. In a television interview on October 9, Taiwo Oyedele argued that much of that oil is already spoken for under contracts and cost-recovery rules, which limits what the government can hand to domestic refiners or use to cut fuel prices.
Oyedele, who is Minister of Finance and Coordinating Minister of the Economy, spoke on Channels Television’s Politics Today. Corrected on the anchor’s figure, he said the 1.8 million barrels a day includes condensate. He then explained the arithmetic behind his argument. Under production-sharing contracts and joint ventures, he said, the output is split between the government and its partners in ratios that vary but average roughly 45 to 55. Part of the volume also goes to cost oil, the barrels that pay back operators’ spending, and royalties and production costs take further bites. The result, in his words, is that the country does not have up to 700,000 barrels a day of free crude to give anyone, including the Dangote refinery.
That 700,000 figure matters because it matches the refinery’s estimated daily appetite. The Presidency has since repeated the same message. In a statement, presidential adviser Sunday Dare said production costs, royalties and profit-oil sharing severely reduce the equity crude available to the state, leaving fewer than 700,000 barrels a day of unencumbered volume. Another Presidency statement said Oyedele had made clear that Nigeria produces about 1.8 million barrels a day for a population above 200 million, and that the Federal Government does not directly own all of it.
The interview was a response to political pressure over fuel prices. Opposition leader Atiku Abubakar has called for a production subsidy for domestic refiners, essentially selling them crude below market price so they can sell fuel cheaper. Oyedele rejected that approach, saying crude is the main input in making petrol and must carry a cost even when produced at home, and that selling it to refiners below prevailing prices would hit government revenue. He also pushed back on the comparison of crude with farm produce such as cassava, noting that global commodity markets and contractual obligations make the two cases different. Government aides went further, with Dare arguing that a blanket production subsidy without physical, unencumbered volumes to back it would invite opacity and the round-tripping that plagued the old subsidy system.
Oyedele made a striking point about scale. Comparing Nigeria’s output with its population, he said that on a per capita basis the country is barely producing enough to call itself an oil producer, using Qatar as a contrast. The line was rhetorical, but it underlined his view that 1.8 million barrels spread across more than 200 million people is a thin base for broad subsidies.
The remarks fit with figures reported elsewhere. NNPC has been cited as reporting production of about 1.821 million barrels a day including condensate, while the regulator’s August monthly figure was 1.68 million barrels a day, with crude alone near 1.5 million, so the 1.8 million number depends on whether weekly readings and condensate are counted. Dangote refinery’s own purchasing shows the gap between demand and supply: Reuters reported in September that the refinery had lined up at least 16 million barrels of Nigerian crude for October, about 520,000 barrels a day, supplemented by US grades, which is consistent with the minister’s claim that there is not enough free domestic crude to cover its full requirement.
Oyedele defended the naira-for-crude arrangement, introduced under President Bola Tinubu, as a measure that brought stability to fuel supply. He also said the government’s forward-sales idea, under which crude would be committed to domestic refineries ahead of time, could help shield local prices from global swings as production rises and previously committed barrels become available. The Crude Oil Refinery-Owners Association of Nigeria has backed forward sales but warned against a petrol price cap, arguing that improving crude production, securing feedstock for local refineries and cutting refining costs would be a more sustainable answer to high petrol prices than administratively setting prices, according to a report on the group’s position.
Why does this distinction matter to ordinary Nigerians? Because it sets the limits of what policy can do. If only a portion of the 1.8 million barrels is available to the state for domestic use, then promises to sell crude cheaply to refiners or to give blanket price relief would require either buying barrels at market prices, which costs money, or cutting into revenue that funds budgets and allocations. It also explains why the government is leaning on narrower tools such as NNPC’s 30-day discount, a proposed ex-gantry ceiling and forward sales rather than a general subsidy.
Questions remain unanswered. The minister did not give a precise breakdown of how many barrels fall into each category, and the 45 to 55 sharing ratio he cited is approximate. How forward sales would be structured, which barrels would be committed and at what price, has not been published. Until it is, the central takeaway stands: production headlines and the volume available for policy are two different numbers, and the second one is smaller.
