The management of Dangote Petroleum Refinery and Petrochemicals (DPRP) has expressed concern over the continued issuance of import licenses for petroleum products despite the refinery’s proven ability to meet and exceed Nigeria’s national Premium Motor Spirit (PMS) requirements.
The refiner noted that while it remains fully committed to supporting Nigeria’s energy security and ensuring uninterrupted availability of fuel across the country, the volume of imported PMS entering the market has created uncertainty in domestic demand planning and inventory management.
According to market data available to the refiner, imported PMS accounted for approximately 43 percent of the fuel supplied to the Nigerian market in July, a fact that raises questions about the need to continue large-scale imports when there is significant local refining capacity.
Since commencing operations, Dangote Refinery has consistently maintained sufficient inventory levels and reserved product volumes to ensure consistent supply to the Nigerian market. This commitment has required significant investment in warehousing, logistics and working capital, all aimed at protecting Nigerians from supply disruptions and market volatility.
However, the refiner stated that the lack of transparency regarding the actual volume of imported products expected in the country makes effective production and inventory planning increasingly challenging. Maintaining large stock positions without clear visibility into import volumes imposes substantial maintenance costs on the refinery and ultimately undermines efficient market operations.
“As a responsible energy supplier, we have always strived to maintain adequate reserves to meet local demand at all times. However, in an environment where significant volumes of imported PMS continue to enter the market through licenses issued by the regulator and where there is limited visibility over future import volumes, it becomes commercially unsustainable to continue holding excess inventory indefinitely,” he said.
The refinery explained that, under these circumstances, any surplus product that is not immediately absorbed by the domestic market must be exported to regional and international markets. Consequently, DPRP export volumes have increased in recent months, not because local demand cannot be met, but because excess inventory generated by market uncertainty must be evacuated to avoid unnecessary storage and financing costs.
Dangote Refinery stressed that its growing exports should not be interpreted as a lack of commitment to the Nigerian market. Rather, exports are a prudent operational response to the realities of a market where imported products continue to compete with locally refined fuel despite the availability of sufficient domestic refining capacity.
The company reiterated that it remains ready, willing and able to meet and exceed Nigeria’s petroleum products requirements and continues to invest heavily to ensure reliable supply across the country.
The refinery further stated that should any supply shortage arise as a result of market distortions created by excessive importation and the inability of local producers to accurately forecast domestic demand, such shortage should not be attributed to the Dangote Refinery, which has consistently demonstrated its capacity and commitment to serve the Nigerian market.
The DPRP therefore called for greater transparency, better market coordination and policies that support local refining, improve energy security, conserve foreign exchange and maximize the economic benefits of Nigeria’s investments in domestic refining capacity.
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