Dangote Refinery Threatens to Export Petrol as Import Surge Disrupts Domestic Market

Dangote Refinery Threatens to Export Petrol as Import Surge Disrupts Domestic Market

The Dangote Petroleum Refinery has warned that it may increase petrol exports as rising imports create uncertainty over domestic demand, making production and inventory planning increasingly difficult. The company said imported Premium Motor Spirit (PMS) accounted for approximately 43 per cent of fuel supplied into the Nigerian market in July, despite its capacity to meet and exceed domestic requirements. The refinery said the continued issuance of petroleum product import licences had created uncertainty in demand planning and inventory management, forcing it to reconsider how much petrol it should keep in stock for the domestic market. According to the company, it has consistently maintained sufficient inventory and reserved product volumes to guarantee steady supply since commencing operations, requiring significant investments in storage, logistics and working capital.

The company said the lack of transparency over the volume of imported petrol expected into the country was making it difficult to plan production and inventory efficiently. “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 said in a statement. The refinery explained that maintaining large stock positions without clear visibility into import volumes imposes substantial carrying costs and ultimately undermines efficient market operations.

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The refinery said surplus products that were not immediately absorbed by the domestic market would have to be exported to regional and international markets. It stressed that the development should not be interpreted as a withdrawal from the Nigerian market, insisting that it remained committed to ensuring adequate fuel supply across the country. “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 emphasised. The company said exports had become necessary to avoid unnecessary storage and financing costs associated with holding excess petrol stocks. It mentioned that it remained ready and able to meet and surpass Nigeria’s petroleum product requirements, while continuing to invest in reliable supply.

Official data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) shows how quickly Nigeria’s petrol supply balance has shifted. In May, imported petrol averaged just 5.9 million litres per day, accounting for about 12 per cent of total supply, while domestic sources provided 41.5 million litres per day. The balance shifted dramatically in June. Imports jumped to 18.1 million litres per day—an increase of more than 200 per cent from May—while domestic supply dropped to 32.5 million litres per day. By July, imports had risen further to 19.7 million litres per day as domestic supply declined again to 25.8 million litres per day. The shift marked a reversal from earlier in the year when Nigeria appeared to be moving rapidly towards eliminating petrol imports. Regulators stopped issuing petrol import licences in February after determining that domestic production was sufficient to meet demand.

The dispute over import licences has escalated into legal action. The Dangote Petroleum Refinery has filed a lawsuit against the Federal Government at the Federal High Court in Lagos, challenging the issuance and renewal of fuel import licences by the NMDPRA. The refinery argues that such approvals violate provisions of the Petroleum Industry Act (PIA), which permits imports only when domestic production is insufficient. It also claims the licences breach an earlier court order directing parties to maintain the status quo. The licences were granted to six marketers—including NIPCO, AA Rano, Matrix, Shafa, Pinnacle, and Bono—covering the importation of between 600,000 and 720,000 metric tonnes of petrol. The Nigerian National Petroleum Company Limited (NNPC) has dismissed Dangote’s assertions, claiming that under the PIA, regulators have the discretion to issue import licences to ensure supply security. It has further accused the refinery of attempting to monopolise the market.

The dispute comes at a particularly significant moment for Nigeria’s petroleum industry. Just days before Dangote’s latest statement, the US Energy Information Administration said Nigeria’s seaborne petroleum product exports had increased more than sevenfold since 2023, driven largely by production from the Dangote refinery. Nigeria exported an average of 350,000 barrels of petroleum products per day during the second quarter of 2026, compared with just 46,000 barrels per day in 2023. At the same time, Nigeria’s seaborne petroleum product imports have fallen substantially from nearly 400,000 barrels per day in 2023 to less than 130,000 barrels per day in the second quarter of this year. The refinery, with a nameplate capacity of 650,000 barrels per day, is expected to play a central role in Nigeria’s energy security and foreign exchange earnings as global fuel trade patterns shift amid geopolitical tensions.

The refinery 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. It also warned that any future supply shortfalls resulting from market distortions caused by excessive imports and the inability of local refiners to accurately forecast demand should not be blamed on Dangote Refinery.

Dangote Refinery Threatens to Export Petrol as Import Surge Disrupts Domestic Market