By Emmanuel Egobiambu
The Federal Government says Nigeria’s crude oil production capacity is inadequate to supply the Dangote Refinery and meet local refining needs.
Nigeria’s Minister of Finance, Taiwo Oyedele, made the comment on Friday following 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 on Channels Television’s Politics Today.
He explained that though Nigeria produces 1.8 million barrels of crude oil daily presently, “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,” the minister said on the current affairs show.
“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.”
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 continues to ramp 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.
His comment came amid calls for the return of fuel subsidy.
Opposition figures have announced different proposals, including a production subsidy for refineries in the country.
On Thursday, Oyedele disclosed that the Federal Government has introduced a 30-day discount on petrol dispensed by the Nigerian National Petroleum Company Limited (NNPCL).
That move, however, attracted criticism from opposition politicians and Nigerians alike, who accused the Federal Government of introducing a subsidy from the back door.
President Bola Tinubu, who is seeking a second term, pushed through sweeping economic reforms when he came into office in 2023, including scrapping a major fuel subsidy and floating the naira.
While economists have broadly backed the measures, they have driven up living costs and deepened hardship in Africa’s most populous country.
Cheap petrol — which in turn had driven down prices of food and goods throughout the country — had for some been the most important government benefit they received amid decades of poor services and graft.
Tinubu has said the reforms averted an even greater crisis as the subsidy grew fiscally unsustainable.
Nigeria, Africa’s top oil producer, hosts the continent’s largest refinery, owned by Africa’s richest man, Aliko Dangote.
But fuel prices have risen to about N1,400 ($1.00) per litre from the N830 seen before the war in the Middle East, with the government doing little to rein in prices and instead deferring to the market.
Credit – Channels TV
(vitalnewsngr.com)
