Dangote Refinery Decries Rising Fuel Imports Despite Strong Local Supply Capacity

Dangote Refinery Decries Rising Fuel Imports Despite Strong Local Supply Capacity • Alleges absence of transparency over actual volume of imported products expected The management of Dangote Petroleum Refinery and Petrochemicals has expressed concern over the continued issuance of petroleum product import licences, despite its proven capacity to meet and exceed Nigeria’s domestic Premium Motor Spirit (PMS) requirements. In a statement issued yesterday, the refinery said while it remained fully committed to supporting Nigeria’s energy security and ensuring uninterrupted fuel availability across the country, the volume of imported PMS entering the market had created uncertainty in domestic demand planning and inventory management. The refinery quoted market data available to it as saying that imported PMS accounted for approximately 43 per cent of the fuel supplied into the Nigerian market in July, a development it said raised questions about the necessity of continued large-scale imports when substantial local refining capacity existed. According to the statement, since commencing operations, Dangote Refinery has consistently maintained sufficient inventory levels and reserved product volumes to guarantee steady supply to the Nigerian market. It added that this commitment had required significant investment in storage, logistics, and working capital, all aimed at protecting Nigerians from supply disruptions and market volatility. However, the refinery stated that the absence of transparency regarding the actual volume of imported products expected into the country made effective production and inventory planning increasingly challenging. It stated that maintaining large stock positions without clear visibility into import volumes imposed substantial carrying costs on the refinery and ultimately undermined efficient market operations. Dangote Refinery said, “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 explained that, under the circumstances, any surplus products not immediately absorbed by the domestic market, must be exported to regional and international markets. Consequently, the refinery said its export volumes had increased in recent months, not because local demand could not be met, but because excess inventory generated by market uncertainty must be evacuated to avoid unnecessary storage and financing costs. Dangote Refinery emphasised that its growing exports should not be interpreted as a lack of commitment to the Nigerian market. Rather, it explained that exports were a prudent operational response to the realities of a market where imported products continued to compete with locally refined fuel despite the availability of sufficient domestic refining capacity. The company reiterated that it remained ready, willing, and able to meet and surpass Nigeria’s petroleum product requirements, and had continued to invest heavily in ensuring reliable supply across the country. The refinery stated that should any supply shortfalls arise as a result of market distortions created by excessive importation and the inability of local producers to accurately forecast domestic demand, such shortages should not be attributed to it, as it had consistently demonstrated capacity and commitment to serving the Nigerian market. Dangote Refinery called for greater transparency, improved market coordination, and policies that support local refining, enhance energy security, conserve foreign exchange, and maximise the economic benefits of Nigeria’s investments in domestic refining capacity.