Dangote considers cutting petrol supply to importers

The Dangote Petroleum Refinery and Petrochemicals may stop selling petrol to major marketers that continue importing fuel, a move driven by concerns that imported petrol is being mixed with products from the refinery.

The measure could take effect as early as this week, although consultations and possible last-minute intervention could change the plan. The refinery is particularly concerned that marketers are allegedly blending imported PMS with petrol bought from Dangote before distributing it to consumers.

Dangote says the practice could make it difficult to distinguish its products from fuel mixed or handled by third parties. “It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery,” a senior refinery official said.

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It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery.

The refinery has also raised concerns about the lack of a standard laboratory and adequate quality-control systems for imported petroleum products. It said the capacity to independently verify and certify the specifications of fuel entering Nigeria was limited.

The proposed restriction follows a warning that rising imports were forcing Dangote to export excess stocks despite having enough capacity to meet domestic demand. The refinery said imported PMS represented about 43% of petrol supplied in Nigeria in July.

Dangote said import licences had made future demand uncertain and complicated production and inventory planning. It said maintaining large reserves indefinitely was commercially unsustainable when the refinery could not predict how much imported petrol would enter the market.

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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.