Oyedele Explains Why Nigeria Cannot Allocate All Its Crude to Local Refineries

Taiwo Oyedele says Nigeria’s daily crude output cannot be treated as oil fully available for domestic refining. He said production costs, royalties, profit-sharing agreements and the contractual shares of oil companies must be settled before the government’s own share is determined. Speaking amid debate over the cost of locally refined petrol, Oyedele argued that supplying crude to local refiners below market value could reduce revenue available to the treasury. He said crude remains the largest cost in petrol production, alongside freight, insurance and high financing costs. He also warned that returning to fuel subsidies could encourage cross-border diversion and recreate the financial pressures associated with the former subsidy regime. The comments renew questions over whether domestic refiners should get Nigerian crude at international prices or under a discounted local arrangement.

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