Dangote Refinery: Rising Fuel Imports Force Greater Export Focus Despite Strong Local Supply Capacity

Dangote Refinery: Rising Fuel Imports Force Greater Export Focus Despite Strong Local Supply Capacity

LAGOS — The management of Dangote Petroleum Refinery and Petrochemicals (DPRP) has raised concerns over the continued issuance of petroleum product import licences, saying rising volumes of imported Premium Motor Spirit (PMS) are creating uncertainty for domestic production, inventory planning and market stability.

The refinery said it has sufficient capacity to meet and exceed Nigeria’s domestic PMS requirements and remains committed to ensuring uninterrupted fuel supply across the country.

However, according to market data available to the company, imported PMS accounted for about 43 per cent of fuel supplied into the Nigerian market in July, raising questions over the need for continued large-scale imports amid growing domestic refining capacity.

Since commencing operations, Dangote Refinery said it has maintained adequate inventories and reserved product volumes to ensure steady supplies to the Nigerian market. It added that significant investments have been made in storage, logistics and working capital to guard against supply disruptions and market volatility.

The refinery, however, said the lack of transparency over the volume of imported petroleum products expected into the country has made production and inventory planning increasingly difficult.

According to the company, holding substantial inventories without adequate visibility on future import volumes imposes significant storage and financing costs and makes it commercially difficult to maintain excess stocks indefinitely.

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

The company explained that surplus petroleum products that are not immediately absorbed by the domestic market must consequently be evacuated to regional and international markets.

It said this situation has contributed to the increase in its export volumes in recent months, stressing that the development should not be interpreted as an inability or unwillingness to meet Nigeria’s fuel needs.

Rather, the refinery described the increased exports as a commercial and operational response to market uncertainty, particularly where imported products continue to compete with locally refined fuel despite the availability of substantial domestic refining capacity.

Dangote Refinery reiterated that it remains “ready, willing and able” to meet and surpass Nigeria’s petroleum product requirements, adding that it continues to invest in infrastructure and operations to support reliable fuel supply nationwide.

The company further cautioned that any future supply shortfalls arising from market distortions, excessive importation or difficulties in accurately forecasting domestic demand should not automatically be attributed to the refinery.

It said it has consistently demonstrated both the capacity and commitment to serve the Nigerian market.

DPRP therefore called for greater transparency, improved market coordination and policies that support domestic refining, arguing that such measures would strengthen Nigeria’s energy security, conserve foreign exchange and maximise the economic benefits of investments in local refining capacity.