The Dangote Petroleum Refinery has threatened to export excess Premium Motor Spirit (petrol) stocks as rising imports create uncertainty over domestic demand and make inventory planning increasingly difficult.
The refinery said imported petrol accounted for about 43 per cent of total fuel supplied to the Nigerian market in July, despite its capacity to meet and exceed domestic demand.
It added that the continued issuance of licences for petroleum product imports had created uncertainty around demand forecasting and inventory management, prompting it to reconsider the volume of petrol it should hold for the domestic market.
The refinery said the continued issuance of petroleum product import licences had created uncertainty around demand forecasting and inventory management, forcing it to reassess the volume of petrol it should hold for the domestic market.
According to the refinery, it has consistently maintained adequate inventory and reserved product volumes to ensure steady petrol supply across Nigeria since commencing operations.
It added that sustaining these stock levels had required significant investments in storage infrastructure, logistics and working capital.
“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 on Wednesday.
The refinery explained that any surplus petrol not immediately absorbed by the domestic market would have to be exported to regional and international markets.
The refinery said the increase in its export volumes did not indicate an inability to meet domestic demand, but rather reflected the need to manage excess inventory amid uncertainty over the volume of imported petrol entering the Nigerian 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 said exports had become necessary to avoid additional storage and financing costs associated with holding excess petrol stocks.
It stressed that the move should not be interpreted as a withdrawal from the Nigerian market, maintaining that it remained committed to ensuring an adequate and reliable supply of fuel 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 refinery said it remained ready and capable of meeting or exceeding Nigeria’s petroleum product requirements while continuing to invest in reliable domestic supply.
It warned, however, that any future supply shortfalls arising from market distortions caused by excessive imports and the inability of local refiners to accurately forecast demand should not be attributed to the Dangote Refinery.
