Dangote Refinery Warns Fuel Imports Are Pushing Local Production Into Export Markets

The Dangote Petroleum Refinery and Petrochemicals has raised concerns over the continued issuance of petroleum product import licences, saying the influx of imported petrol is forcing it to direct more of its output to regional and international markets.

The refinery said in a statement on Wednesday that it has the capacity and inventory required to meet and surpass Nigeria’s domestic demand for Premium Motor Spirit, commonly known as petrol. However, it argued that large-scale imports are creating uncertainty in demand forecasting, production planning and inventory management.

According to market data cited by the company, imported petrol accounted for approximately 43 per cent of the product supplied to the Nigerian market in July.

Dangote Refinery said the figure raised questions about the need for continued large-scale imports when sufficient domestic refining capacity was available.

The company maintained that it remained committed to supporting Nigeria’s energy security and ensuring an uninterrupted supply of petroleum products nationwide. Since beginning operations, it said it had maintained adequate inventories and reserved product volumes for the domestic market.

According to the refinery, sustaining those reserves requires substantial investment in storage, logistics and working capital, with the objective of shielding consumers from shortages and market volatility.

It warned, however, that limited information about the volume and timing of expected imports had made it increasingly difficult to plan production and manage inventories efficiently.

“As a responsible energy provider, we have always endeavoured to keep adequate reserves to satisfy local demand at all times,” the refinery said.

“However, in an environment where significant volumes of imported PMS continue to enter the market through licences issued by the regulator, and where there is limited visibility on future import volumes, it becomes commercially unsustainable to continue holding excess inventory indefinitely.”

The company explained that products not immediately absorbed by the domestic market must be exported to avoid mounting storage, financing and inventory-carrying costs.

It said its export volumes had consequently increased in recent months, stressing that the trend did not indicate an inability or unwillingness to supply Nigeria.

Rather, it described exports as a commercially necessary response to excess inventory caused by market uncertainty and competition from imported petroleum products.

Dangote Refinery also cautioned against interpreting its growing export activity as a retreat from the Nigerian market. It insisted that it remained ready, willing and able to meet the country’s petroleum product requirements.

The company said any future supply shortfall resulting from market distortions, excessive imports or the inability of domestic refiners to forecast demand accurately should not be blamed on the refinery.

It called for greater transparency around import volumes, improved coordination among industry stakeholders and policies that prioritise domestic refining.

According to the company, stronger support for local production would enhance Nigeria’s energy security, conserve foreign exchange and maximise the economic benefits of investments in domestic refining capacity.