The Dangote Petroleum Refinery and Petrochemicals is considering a major change in how it sells petrol to fuel marketers, as concerns grow over the increasing importation of Premium Motor Spirit (PMS) into Nigeria.
The refinery may stop supplying petrol to major marketers that continue to import the product, according to sources familiar with the matter. The decision could take effect as early as this week, although further discussions and possible intervention could still change the plan.
One of the refinery’s major concerns is the alleged blending of imported petrol with products purchased from Dangote Refinery. The company is worried that such practices could affect the quality of fuel reaching consumers and make it difficult to identify the original source of a product.
A senior official at the refinery reportedly expressed concern that the company invests heavily in producing petroleum products that meet quality standards, only for some of the products to potentially be mixed with imported fuel of uncertain specifications.
The refinery is also questioning the quality-control system for imported petrol entering Nigeria. It has raised concerns about the availability of properly equipped laboratories capable of independently testing and certifying imported PMS before it reaches the market.
The latest development follows growing tension between domestic refining and petrol imports. Dangote Refinery recently warned that increasing petrol imports were creating difficulties for its production and inventory planning.
According to the refinery, imported petrol accounted for about 43 per cent of the total PMS supplied to the Nigerian market in July. It argued that the continued approval of import licences has made it difficult to accurately predict domestic demand.
Dangote Refinery said it has maintained sufficient petrol stocks and reserves to ensure Nigerians have access to fuel. However, it said holding large quantities of unsold petrol for long periods is becoming financially difficult when imported products continue entering the market.
The refinery explained that when domestic demand cannot absorb its available supply, it may have to export the excess petrol to other African and international markets.
The possible decision to stop supplying petrol to marketers who also import the product could therefore represent a new stage in the refinery’s response to rising fuel imports.
For consumers, the development could have implications for petrol supply, pricing and competition in the downstream oil market. It also highlights the growing debate over how Nigeria should balance domestic refining with fuel imports.
With Dangote Refinery now capable of producing large volumes of petroleum products, the government and industry regulators may face increasing pressure to create a clear and transparent framework for both locally refined and imported petrol.
The coming days are expected to determine whether the proposed restriction will be implemented or whether further discussions between the refinery, marketers and regulators will produce another solution.
