Without Crude, It Cannot Operate – FG Speaks On Dangote Refinery’s Supply Crisis

The Federal Government has explained that it sells part of its oil production in advance, which is why the Dangote Refinery has a persistent crude oil shortage.

Naija News reports that the Special Adviser to President Bola Ahmed Tinubu on Media and Public Communications, Sunday Dare, disclosed this on Trust TV’s 30 Minutes programme with Mannir Dan-Ali.

He, however, stated that he does not have the exact figures for the quantity of crude oil sold ahead of time.

“Why is it not getting enough? It is because part of our oil production has been sold ahead of time,” he said.

His remarks come amid continuing disagreements over the implementation of the Federal Government’s naira-for-crude policy.

Introduced in 2024, the policy allows domestic refineries to buy crude oil in naira and supply petroleum products to the local market in the same currency.

The arrangement was intended to ease pressure on foreign exchange, reduce the cost of importing refined petroleum products and strengthen domestic refining capacity.

However, the Dangote Refinery has repeatedly complained that the quantity of crude supplied under the initiative falls short of its requirements.

In July, the company began pricing some locally sold petroleum products in dollars, citing difficulties in securing adequate crude supplies through the naira-for-crude programme.

Dare said the Tinubu administration had introduced measures to improve domestic refining, including the naira-for-crude policy, which he said helped address the refinery’s difficulties in obtaining foreign exchange.

He argued that the policy showed the President’s willingness to intervene to support local refining, despite challenges with crude availability.

“Without the crude oil it needs, that refinery cannot operate,” he said.

The presidential aide also defended the government’s role in establishing the refinery.

He argued that federal support and the policy environment under Tinubu were important to its development.

He said the Federal Government had made substantial financial commitments to the project and that the refinery would have faced difficulties without access to foreign exchange.

However, he acknowledged that the facility still needed government support to secure adequate crude supplies.