Finance Minister Taiwo Oyedele told reporters on Thursday that Nigeria’s recent removal of fuel subsidies has revealed a shortfall in the country’s crude oil supply, leaving local refineries such as the Dangote refinery unable to obtain enough feedstock.
Oyedele explained that the shortfall stems from high production costs and existing contractual obligations that limit the volume of crude available for domestic processing. He said the government is “facing a gap between the crude needed by our refineries and what is currently being produced and allocated.”
The minister added that the situation is a direct consequence of the subsidy removal, which was intended to reduce the fiscal burden on the state but has also exposed structural weaknesses in the oil sector. “When the subsidy was in place, the market was distorted, and now we see the real supply constraints,” he said.
Local refineries, including the world‑largest privately owned Dangote refinery, have been counting on a steady supply of Nigerian crude to meet growing domestic demand for petroleum products. The shortfall threatens to force these plants to import more crude, potentially raising costs and undermining the government’s goal of achieving fuel self‑sufficiency.
Oyedele did not provide a specific timeline for addressing the gap but indicated that the Ministry of Finance is reviewing production incentives and contract terms to improve the availability of crude for local use.
<small>Source: Punch Nigeria — read the original story there.</small>