Dangote Petroleum Refinery and Petrochemicals (DPRP) has raised concerns over the continued issuance of licences for petroleum product imports, saying the growing volume of imported fuel is compelling it to export more of its surplus production despite having adequate capacity to satisfy Nigeria’s domestic Premium Motor Spirit (PMS) demand.
The refinery reaffirmed its commitment to strengthening Nigeria’s energy security and ensuring a steady supply of petrol but warned that the rising influx of imported PMS was creating uncertainty around domestic demand, production planning and inventory management.
DPRP said market data available to it showed that imported PMS accounted for about 43 per cent of total fuel supplied to the Nigerian market in July.
According to the refinery, the figure raises concerns over the continued reliance on large-scale imports when substantial domestic refining capacity is available to meet the country’s needs.
Since beginning operations, DPRP said it had maintained adequate fuel inventories and reserved product volumes to ensure consistent supply to the domestic market.
It explained that maintaining such reserves requires significant investments in storage facilities, logistics and working capital to shield the market from potential supply disruptions and price volatility.
However, the refinery said the lack of sufficient information on the volume of imported petroleum products expected to enter the country was making production and inventory planning increasingly challenging.
DPRP noted that holding large quantities of fuel without clear information about incoming imports creates additional carrying costs and makes efficient market operations more difficult.
“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 stated.
The company explained that when locally refined products are not immediately absorbed by the domestic market, they must be exported to regional and international markets to reduce storage and financing costs.
It said the recent increase in exports was therefore not due to a lack of capacity or willingness to supply Nigeria, but rather a response to excess inventories created by uncertainty in domestic demand.
The refinery stressed that its increased export activities should not be interpreted as a decline in its commitment to the Nigerian market.
Instead, it described the exports as a necessary operational measure in a market where imported petroleum products continue to compete with locally refined fuel despite the availability of sufficient domestic refining capacity.
DPRP reiterated that it remained ready and capable of meeting, and even exceeding, Nigeria’s petroleum product requirements, adding that it was investing further in infrastructure and logistics to guarantee reliable fuel supplies across the country.
The refinery also cautioned against blaming it for any potential fuel shortages that may arise if excessive imports distort market conditions and make it difficult for domestic producers to accurately forecast demand and maintain optimal inventory levels.
DPRP consequently called for greater transparency and stronger coordination within Nigeria’s downstream petroleum sector.
It also urged the adoption of policies that would promote domestic refining, enhance energy security, conserve foreign exchange and ensure that Nigeria derives maximum economic value from investments in local refining capacity.
