Dangote Threatens to Export Petrol as Imports Rise

The Dangote Petroleum Refinery has threatened to export excess petrol stocks as rising imports create uncertainty around domestic demand and make inventory planning increasingly difficult.

The refinery said imported Premium Motor Spirit, PMS, accounted for about 43 per cent of petrol supplied to the Nigerian market in July, despite its capacity to meet and exceed domestic demand.

According to the company, the continued issuance of petroleum product import licences has made it difficult to accurately forecast domestic demand and determine appropriate inventory levels.

The refinery said it had consistently maintained sufficient petrol stocks and reserved product volumes to ensure steady supply to the Nigerian market since commencing operations.

It added that maintaining such reserves had required significant investments in storage facilities, logistics and working capital.

However, Dangote Refinery said the lack of transparency over the volume of imported petrol expected into Nigeria was making production and inventory planning increasingly challenging.

The company warned that maintaining large stocks indefinitely without adequate information about future imports was becoming commercially unsustainable because of the associated storage and financing costs.

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

It explained that when excess petrol is not immediately absorbed by the domestic market, the surplus would have to be exported to regional and international markets.

The refinery stressed that increased exports should not be interpreted as an inability to supply the Nigerian market.

Rather, it said the exports were a response to excess inventory created by uncertainty surrounding the volume of imported petroleum products entering the country.

“Consequently, DPRP’s 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,” it stated.

Dangote Refinery maintained that it remained capable of meeting and exceeding Nigeria’s petroleum product requirements while continuing to invest in reliable domestic supply.

The company also warned that any future fuel shortages arising from market distortions caused by excessive imports should not be blamed on the refinery.

It argued that local refiners need greater visibility of expected imports to plan production efficiently and avoid unnecessary accumulation of stocks.

The refinery called for greater transparency and improved coordination in the petroleum market.

It also urged policies that would support local refining, strengthen Nigeria’s energy security, conserve foreign exchange and maximise the economic benefits of investments in domestic refining capacity.

Dangote Refinery said it remained committed to supplying the Nigerian market but would continue exporting surplus petrol where necessary to manage excess inventory and associated costs.