The Dangote Petroleum Refinery has warned that it may increase exports of excess petrol stocks as rising imports create uncertainty over domestic demand and make production and inventory planning increasingly difficult.
The refinery said imported Premium Motor Spirit (PMS), commonly known as petrol, accounted for about 43 per cent of fuel supplied to the Nigerian market in July, despite its capacity to meet and exceed domestic requirements.
In a statement issued on Wednesday, the company said the continued issuance of petroleum product import licences had made it difficult to determine future demand and manage inventory efficiently.
The refinery said it had consistently maintained sufficient stocks and reserved product volumes to guarantee uninterrupted supply to the domestic market since commencing operations, requiring substantial investment in storage facilities, logistics and working capital.
However, it said the absence of adequate information on the volume of imported petrol expected into the country was creating significant challenges for production planning and inventory management.
“As a responsible energy provider, we have always endeavoured to keep adequate reserves to satisfy local demand at all times,” the refinery said.
It added that maintaining large stocks indefinitely was becoming commercially unsustainable in a market where substantial volumes of imported petrol continued to enter the country and future import levels remained unclear.
The refinery said surplus petrol that could not be immediately absorbed by the domestic market would have to be exported to regional and international markets.
It stressed that the increase in its export volumes should not be interpreted as an inability to meet domestic demand, but rather as a response to excess inventory generated by uncertainty surrounding imported supplies.
“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.
The company warned that holding excessive stocks without sufficient visibility over future imports imposed substantial carrying costs and undermined efficient market operations.
It said exports had therefore become necessary to prevent additional storage and financing costs associated with excess petrol inventories.
Despite the development, the refinery stressed that it remained committed to the Nigerian market and would continue working to ensure adequate fuel supplies across the country.
It said it remained capable of meeting and exceeding Nigeria’s petroleum product requirements while continuing to invest in reliable domestic supply.
The refinery also cautioned that any future petrol shortages resulting 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.
It called for greater transparency in petroleum imports, improved coordination among market participants and policies that would support domestic refining.
According to the company, such measures would strengthen Nigeria’s energy security, conserve foreign exchange and maximise the economic benefits of investments in domestic refining capacity.
