ABUJA, Nigeria — Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has explained why the Federal Government cannot treat the country’s estimated 1.8 million barrels of daily crude oil production as an entirely government-owned resource available for distribution to domestic refineries.

Oyedele made the clarification during an appearance on a Channels Television programme amid renewed controversy over the cost of locally refined petrol, the pricing of Nigerian crude oil and whether domestic refineries should receive crude at discounted rates.

The minister argued that although crude oil is extracted from Nigerian territory, the government does not automatically own or control every barrel produced because of the contractual, financial and production obligations attached to the petroleum industry.

His remarks have reignited debate over Nigeria’s oil wealth, the cost of refining petrol locally and whether Nigerians are receiving sufficient benefits from the country’s crude oil resources.

“Just Because The Crude Is Under Our Soil Does Not Mean All Of It Is Available”

Explaining the government's position, Oyedele said crude oil production involves several financial obligations that must be deducted or accounted for before determining the volume and value of resources available to the government.

According to him, the costs include oil production expenses, the contractual entitlements of international oil companies, royalties and profit-sharing arrangements.

“Just because the crude is under our soil, under our feet, does not mean that all of it is available for you to give to anyone,” the minister said.

He stressed that crude oil production is not cost-free and that the government must recognise the financial interests of companies involved in extracting the resource.

“That was why I made the analysis of, when you bring out a barrel of crude oil, it has so many components. There’s a cost of producing it. It is not free,” Oyedele stated.

He added that international oil companies operating in Nigeria are commercial entities working under contractual arrangements rather than organisations expected to produce crude oil without receiving agreed financial returns.

“There is the one about the portion of the international oil company that is doing it. They are not here to just come and do charity for Nigeria. These are contractual arrangements. There’s a portion of royalty. There is a portion of the profit from oil,” he said.

Minister Warns Against Selling Crude Below Market Price

Oyedele maintained that supplying crude oil to domestic refineries below prevailing market prices could reduce government revenue and affect its capacity to meet financial obligations.

He argued that the volume of crude produced daily should not be confused with the quantity or value of petroleum resources available for the government to allocate.

“At the end of the day, the fact that you have 1.8 million barrels plus condensate a day does not mean that all of it is available for you to give to anyone,” he said.

The minister warned that selling the government's share of crude oil below market value could deprive the treasury of revenue needed to fund public expenditure.

“Whatever you have left, if you give that crude at lower than market price, you lose the revenue that’s supposed to go to the treasury,” he explained.

According to Oyedele, a reduction in government revenue could eventually affect its ability to meet obligations, including the payment of salaries.

His argument centres on the government's position that crude oil supplied to local refiners should be valued commercially rather than automatically discounted because it originates in Nigeria.

However, the debate over domestic crude pricing also raises questions about how the interests of the government, oil producers, local refiners and petroleum consumers should be balanced.

Oyedele Revisits Nigeria’s Controversial Fuel Subsidy Regime

The finance minister also defended the removal of petrol subsidies, arguing that maintaining artificially low petroleum prices could encourage smuggling, revenue losses and other market distortions.

He questioned Nigeria's former estimates of petrol consumption, which had at one point approached 90 million litres daily, asking whether all the products recorded as consumed were actually used within the country.

“There was a time when our consumption was close to 90 million litres a day. You think it was all consumed in Nigeria?” he asked.

Oyedele suggested that subsidised petroleum products could be diverted across Nigeria's borders, allowing consumers and traders in neighbouring countries to benefit from a subsidy funded by Nigerian public resources.

He recalled that protests against the removal of Nigeria's fuel subsidy had also occurred in neighbouring Cameroon.

“When Mr. President removed the subsidy, they were protesting in, I think it was Cameroon,” he said.

The minister argued that even powerful countries struggle to secure their borders completely, making it difficult for Nigeria to prevent all cross-border diversion of subsidised fuel.

“America is the most powerful country in the world. They haven’t been able to secure their border 100%,” Oyedele stated.

He also challenged proposals to restore petrol subsidies while promising to eliminate the corruption associated with the former system.

“If anybody says to you, some of them say we will fight the corruption and then we will bring back the subsidy, I say, with what Mr. President has done, he has removed the corruption,” he said.

“So would you bring the corruption back so that you can fight it, remove it, and then bring up subsidy? It is not adding up.”

His comments reflect the Federal Government's position that subsidy removal is intended to limit market distortions and protect public revenue. However, the policy continues to attract debate over its impact on petrol prices, transportation costs, household expenses and the broader cost of living.

Why Is Petrol Priced At ₦1,350 Per Litre?

Oyedele was also questioned about the calculations behind the ₦1,350-per-litre benchmark announced in connection with petrol pricing.

The discussion focused on how the government arrived at the figure, including the estimated cost of crude oil used as feedstock for domestic refining.

The minister maintained that crude oil remains the principal raw material used in petrol production and must be assigned a cost, even when it is extracted within Nigeria.

“To refine, when you see petrol, the major component that goes into it is crude, crude oil. That crude oil, you have to buy it,” he said.

Oyedele pointed to movements in international crude oil prices and disruptions in global petroleum markets as factors that can influence the cost of feedstock and, consequently, refined petroleum products.

He also cited freight, insurance and financing expenses as additional costs that refineries must consider when calculating the final price of petrol.

According to the minister, the cost of transporting crude oil has increased because of constraints in the availability of vessels, while insurance and financing expenses have also added to the overall cost of refining.

“Freight has gone up because the number of vessels available around the world is constrained,” he said.

“Insurance has gone up. The financing cost is there. Before you bring the crude here, before you refine it, you pay a 30% interest rate. You have to factor it in.”

He further argued that refiners, including the Dangote Refinery, must obtain crude oil at the prices available to them in the market.

“Dangote will take whatever he’s able to get at whatever price,” Oyedele said.

However, the minister's explanation has drawn attention to a central question in Nigeria's domestic refining debate: whether crude produced within the country should be priced primarily according to international market conditions or whether local refiners should receive some form of pricing advantage.

Debate Over Nigeria’s Oil Wealth And Domestic Refining Intensifies

The controversy comes as Nigeria seeks to expand domestic refining capacity and reduce its dependence on imported petroleum products.

Supporters of market-based pricing argue that crude oil has an economic value and that selling it below prevailing market rates could reduce government revenue or create incentives for diversion and other forms of market abuse.

On the other hand, advocates of preferential domestic crude pricing argue that locally produced crude should support domestic refining, potentially reducing the cost of producing petrol and strengthening the country's energy security.

The disagreement highlights the competing interests involved in managing Nigeria's petroleum resources.

For the Federal Government, the central concern is protecting revenue while meeting contractual obligations to oil producers.

For domestic refiners, access to sufficient crude at predictable and commercially viable prices remains important to maintaining production.

For ordinary Nigerians, the ultimate concern is whether increased local refining capacity will translate into more affordable petrol, lower transportation costs and relief from the rising cost of living.

Oyedele's remarks suggest that the government considers Nigerian crude oil a commercial asset subject to production costs, contractual entitlements and competing financial claims, rather than a resource whose entire daily output can be allocated to domestic refineries at government-determined prices.

Nevertheless, questions remain over the precise calculations behind the ₦1,350-per-litre benchmark, the volume of crude oil actually accruing to the Federal Government and the extent to which domestic pricing arrangements could influence the final cost of petrol.

As the debate continues, Nigerians will be watching to see whether the country's growing refining capacity can deliver tangible benefits to consumers while protecting public revenue and ensuring that the nation's oil wealth contributes meaningfully to economic development.