Dangote Warns of Petrol Scarcity if Import Persists

The Dangote Petroleum Refinery has warned that continued large-scale importation of Premium Motor Spirit (PMS), commonly known as petrol, could create market distortions and eventually trigger scarcity, despite the refinery’s capacity to meet and exceed Nigeria’s domestic demand.

The refinery raised the alarm on Wednesday, saying imported petrol accounted for about 43 per cent of the total PMS supplied to the Nigerian market in July.

According to the company,  the continued issuance of import licences by the regulator, despite the availability of substantial domestic refining capacity, was creating uncertainty around demand forecasting, production planning and inventory management.

According to the refinery, it remains fully committed to ensuring uninterrupted fuel supply across the country and has consistently maintained adequate inventories and reserved product volumes to meet local demand.

However, it said the absence of clear information on the actual volume of imported petroleum products entering the country was making it increasingly difficult to plan production and manage its stock efficiently.

“Maintaining large stock positions without clear visibility into import volumes imposes substantial carrying costs on the refinery and ultimately undermines efficient market operations,” the company said.

The refinery explained that where large quantities of imported PMS continue to enter the market, it becomes commercially difficult to maintain excess inventory indefinitely, particularly when there is limited visibility on future import volumes.

It said any surplus petrol that is not immediately absorbed by the Nigerian market would consequently have to be exported to regional and international markets to avoid unnecessary storage and financing costs.

The refinery noted that its increasing export volumes in recent months should therefore not be interpreted as a lack of commitment to the Nigerian market.

Rather, it described the exports as a prudent operational response to a market in which imported products continue to compete with locally refined petrol despite the availability of sufficient domestic refining capacity.

Dangote Refinery stressed that it remains ready and capable of meeting and exceeding Nigeria’s petroleum product requirements, adding that it continues to invest heavily in ensuring a reliable supply of fuel across the country.

It further cautioned that if supply shortfalls eventually emerge as a result of market distortions caused by excessive imports and the inability of local producers to accurately forecast domestic demand, such shortages should not be blamed on the refinery.