By Mary Izuaka

 

The management of Dangote Petroleum Refinery and Petrochemicals (DPRP) has said the continued issuance of petroleum product import licences is forcing it to redirect more output to export markets.

In a statement on Wednesday, the refinery expressed concern that large volumes of imported fuel entering the market were creating uncertainty in demand forecasting and inventory management, making it commercially difficult to sustain excess stockpiles meant for local consumption.

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 Premium Motor Spirit (PMS) entering the market has created uncertainty in domestic demand planning and inventory management.

According to market data cited by the company, imported PMS accounted for approximately 43 per cent of total fuel supplied into the Nigerian market in July. The refinery said the figure raises questions about the continued reliance on imports at a time when substantial local refining capacity exists.

Inventory costs and planning challenges

The refinery said since it commenced operations, it has maintained sufficient inventory levels and reserved product volumes to guarantee steady supply to the Nigerian market.

This commitment, the refinery said, 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,” it said.

Exports not a sign of reduced commitment

Dangote Refinery emphasised that its growing exports should not be interpreted as a lack of commitment to the Nigerian market.

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Rather, it said 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.

Call for policy alignment

The refinery therefore called for greater transparency, improved market coordination, and policies that support local refining, enhance energy security, conserve foreign exchange, and maximise the economic benefits of Nigeria’s investments in domestic refining capacity.