By Seun Ibiyemi
The Dangote Petroleum Refinery has warned that it may export excess Premium Motor Spirit (PMS) stocks as rising petrol imports create uncertainty around domestic demand and complicate inventory planning.
The refinery said imported petrol accounted for about 43 per cent of PMS supplied into the Nigerian market in July, despite its capacity to meet and exceed domestic demand.
The company, in a statement issued on Wednesday, attributed the growing inventory challenge to the continued issuance of petroleum product import licences without sufficient visibility on the volume of imported fuel expected into the country.
According to the refinery, it has consistently maintained adequate petrol reserves and reserved product volumes to guarantee uninterrupted supply to the domestic market since commencing operations.
It said maintaining such inventories had required significant investments in storage, logistics and working capital.
However, the refinery said holding large volumes of petrol indefinitely had become commercially unsustainable in the face of uncertainty over future imports.
“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,” it said.
The refinery said surplus petrol that could not be immediately absorbed by the Nigerian market would have to be exported to regional and international markets.
It stressed that the increase in its export volumes was not due to an inability to meet domestic demand, but rather the need to evacuate excess stocks generated by uncertainty surrounding imported supplies.
“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 stated.
It added that exporting excess petrol would help reduce unnecessary storage and financing costs associated with holding large inventories.
The refinery insisted that such exports should not be interpreted as a withdrawal from the Nigerian market, stressing that it remained committed to providing adequate petroleum products to consumers across the country.
The company called for greater transparency regarding expected petrol imports and improved coordination among stakeholders in the downstream petroleum market.
It argued that clearer information on import volumes would enable domestic refiners to plan production more effectively, manage inventories efficiently and avoid unnecessary costs.
Dangote Refinery also urged policymakers to implement measures that would support local refining, strengthen Nigeria’s energy security, conserve foreign exchange and maximise the economic benefits of investments in domestic refining capacity.
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The company maintained that it remained capable of meeting and surpassing Nigeria’s petroleum product requirements.
It, however, warned that any future supply shortages caused by market distortions arising from excessive imports or the inability of local refiners to accurately forecast demand should not be attributed to the refinery.
The development comes amid continued debate over the role of imported petrol in Nigeria’s downstream petroleum market as domestic refining capacity expands and the country seeks to reduce its dependence on imported petroleum products.
