Yemisi Izuora
Consistent disruption of Nigeria’s downstream market operations is being exacerbated by dominant product import structure which has largely punctured the expected supply sustainability from local refineries with potentials to stabilize market operations.
This view has again been echoed by management of Dangote Petroleum Refinery and Petrochemicals (DPRP) which sadly expressed concern over the continued issuance of petroleum product import licences despite the refinery’s proven capacity to meet and exceed Nigeria’s domestic Premium Motor Spirit (PMS) requirements.
The refinery noted that while it remains fully committed to supporting Nigeria’s energy security and ensuring uninterrupted fuel availability 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 refinery, imported Premium Motor Spirit (PMS) also called petrol, accounted for approximately 43 per cent of the fuel supplied into the Nigerian market in July, a development that raises questions about the necessity of continued large-scale imports when substantial local refining capacity exists.
Since commencing operations, Dangote Refinery has consistently maintained sufficient inventory levels and reserved product volumes to guarantee steady supply to the Nigerian market. This commitment has 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 makes effective production and inventory planning increasingly challenging. Maintaining large stock positions without clear visibility into import volumes imposes substantial carrying costs on the refinery and ultimately undermines efficient market operations.
“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 these circumstances, any surplus products not immediately absorbed by the domestic market must be exported to regional and international markets.
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 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, 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 surpass Nigeria’s petroleum product requirements and continues to invest heavily in ensuring reliable supply across the country.
The refinery further 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 Dangote Refinery, which has consistently demonstrated its capacity and commitment to serving the Nigerian market.
DPRP therefore called for greater transparency, improved market coordination, and policies that support local refining, enhance energy security, conserve foreign exchange, and maximize the economic benefits of Nigeria’s investments in domestic refining capacity.
It will be recalled that Nigeria’s daily domestic petrol supply fell to 25.8 million litres in July, while petrol imports increased to 19.7 million litres per day, according to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The Commission made the disclosure in its monthly performance report released on Monday.
The data showed that domestic petrol supply declined by 21 per cent from 32.5 million litres per day in June, while petrol imports increased by nine per cent from 18.1 million litres per day.
The NMDPRA said total petrol supply fell by 10 percent to 45.5 million litres per day in July, from 50.6 million litres per day in June.
The data showed that diesel supply rose by 46 percent to 23.6 million litres per day, compared with 16.2 million litres per day in the previous month.
The commission said diesel imports stood at 7.9 million litres per day in July, compared with zero in June, while domestic supply fell to 15.7 million litres per day from 16.2 million litres per day.
The LPG supply increased by four per cent to 5.3 kilotonnes per day (KT/D), while aviation fuel receipts declined by 24 per cent to 1.9 million litres per day, the data showed.
The report showed that daily petrol consumption fell by 25 per cent to 35.7 million litres in July, from 47.4 million litres in June, while diesel consumption dropped by eight per cent to 14.7 million litres per day, from 16 million litres per day in June.
The commission said aviation fuel consumption recorded the sharpest decline, falling by 41 per cent from 2.9 million litres per day in June to 1.7 million litres per day in July.
The LPG consumption, however, increased by seven percent to 4.4 kilotonnes per day, from 4.1 kilotonnes per day in June, according to the data.
Unfortunately , crude oil supply by domestic refineries declined by eight per cent to 585,000 barrels per day (bpd) in July, from 632,000 bpd in June, the data showed.
Also it said domestic gas supply fell by eight percent to 4.723 billion cubic feet per day (bcf/d), from 5.116 bcf/d.
The Commission said domestic refineries processed 17.88 million barrels of crude in July, compared with 19.12 million barrels in June.
The data showed that domestic crude supplied to the refineries stood at 12.75 million barrels in July, while imported crude accounted for 5.13 million barrels.
According to the data, the Dangote Petroleum Refinery produced 25.9 million litres of petrol per day in July.
NMDPRA said the refinery supplied 25.8 million litres per day to the domestic market and exported 3.4 million litres per day, with closing stock of 446.1 million litres as of July 31.
The Commission said the refinery produced 19.1 million litres of diesel per day during the month.
According to NMDPRA, the refinery supplied 15.7 million litres of diesel per day to the domestic market and exported 11 million litres per day.
Intake of intermediate products and petrol blendstock by the Dangote refinery fell to zero in July, from 48.27 million litres in June, the data further showed.
The NMDPRA said the refinery operated at an average capacity utilisation of 71.09 percent during the month.
The data also showed that the Port Harcourt Refining Company (PHRC), Warri Refining and Petrochemicals Company (WRPC), and Kaduna Refining and Petrochemical Company (KRPC), were not producing in July as the the Port Harcourt refinery was also shut down in June, while the Warri and Kaduna refineries were also recorded as not producing.
It further added that modular refineries, including WalterSmith, Edo, OPAC and Aradel, supplied an average of 592,000 litres of diesel per day during the period under review.