The management of Dangote Petroleum Refinery and Petrochemicals has raised concerns over the continued issuance of licences for the importation of Premium Motor Spirit (PMS), commonly known as petrol, despite the availability of substantial domestic refining capacity.
The refinery said the continued inflow of imported PMS was creating uncertainty around domestic demand, making it increasingly difficult to plan production, manage inventories and maintain efficient operations.
According to market data available to the refinery, imported PMS accounted for approximately 43 per cent of the petrol supplied to the Nigerian market in July.
Dangote Refinery said the development raises questions about the need for large-scale petrol imports at a time when local refining capacity is available to meet and exceed domestic requirements.
Since commencing operations, the refinery said it has maintained adequate product stocks and reserved volumes to ensure a steady supply of petrol to the Nigerian market. It added that this has involved substantial investment in storage facilities, logistics and working capital to minimise the risk of supply disruptions and market volatility.
However, the company said the lack of clear information on the volume of imported petrol expected into the country has made production and inventory planning increasingly difficult.
It explained that maintaining large inventories without adequate visibility into import volumes creates significant carrying and financing costs, while also affecting the efficiency of the domestic petroleum market.
The refinery said it had always prioritised the availability of petroleum products for Nigerian consumers but noted that continued competition from imported products makes it commercially difficult to hold excess inventory indefinitely.
According to the company, when locally refined products are not immediately absorbed by the domestic market, the surplus has to be redirected to regional and international markets to prevent unnecessary storage and financing costs.
Dangote Refinery explained that the increase in its export volumes in recent months should therefore not be interpreted as a reduction in its commitment to the Nigerian market.
Rather, it said the exports are an operational response to excess inventory arising from uncertainty over domestic demand and the continued entry of imported PMS into the market.
The refinery reiterated its readiness to meet and surpass Nigeria's petroleum product requirements, stressing that it remains committed to investing in reliable and sustainable domestic fuel supply.
It further cautioned that any future supply shortages resulting from market distortions caused by excessive importation and difficulties in accurately forecasting domestic demand should not be attributed to Dangote Refinery.
The company said it has consistently demonstrated the capacity and willingness to supply the Nigerian market.
Dangote Refinery therefore called for greater transparency in the petroleum products market, improved coordination among stakeholders and policies that encourage local refining.
It said such measures would strengthen Nigeria's energy security, reduce pressure on foreign exchange, improve market efficiency and ensure that the country derives maximum economic benefits from its investments in domestic refining capacity.
(NAN)