The Dangote Petroleum Refinery has threatened to export excess petrol stocks as surging imports cause uncertainties about domestic demand and make inventory planning more difficult.
The refinery stated that imported Premium Motor Spirit (petrol) accounted for around 43% of gasoline supplied into the Nigerian market in July, despite its ability to meet and surpass domestic demand.
It stated that the ongoing issuing of petroleum product import licenses had caused uncertainty in demand planning and inventory management, requiring it to reevaluate how much fuel it should keep on hand for the local market.
Since its inception, the refinery has always maintained sufficient inventory and reserved product volumes to provide a constant supply to the Nigerian market. It stated that this necessitated large storage, logistical, and working capital investments.
However, the corporation stated that the lack of information on the volume of imported petrol coming into the country made it difficult to organize production and inventories effectively.
“As a responsible energy provider, we have always endeavored 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 licenses 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 on Wednesday.
The refinery said that any excess goods that were not quickly absorbed by the domestic market would have to be sold to regional and international markets.
It stated that its increasing export quantities were not a result of an inability to meet local demand, but rather a response to surplus inventory caused by uncertainty about the number of imported products entering the market.
“However, 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,” it stated.
The company mentioned that exports had become necessary to avoid unnecessary storage and financing costs associated with holding excess petrol stocks. 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 emphasized.
The refinery stressed that it remained ready and able to meet and surpass Nigeria’s petroleum product requirements while continuing to invest in a reliable supply.
It also issued a warning 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.
“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,” the statement concluded.
