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The management of Dangote Petroleum Refinery and Petrochemicals, DPRP, has raised concerns over the continued approval of petroleum product import licences despite the refinery’s capacity to adequately meet Nigeria’s domestic Premium Motor Spirit, PMS, demand.

The refinery said it remains committed to strengthening the country’s energy security and maintaining a reliable supply of fuel nationwide.

However, it noted that the growing volume of imported PMS entering the Nigerian market has created difficulties in forecasting domestic demand and managing inventory.

Market figures available to the refinery indicate that imported PMS represented about 43 per cent of total fuel supplied to the Nigerian market in July.

The development, according to the refinery, raises questions over the need for continued large-scale petrol imports at a time when substantial domestic refining capacity is available.

Since beginning operations, Dangote Refinery said it has consistently maintained adequate stock levels and reserved product volumes to ensure uninterrupted supply to the Nigerian market.

The company explained that achieving this has required substantial spending on storage facilities, logistics and working capital to shield consumers from possible supply disruptions and price volatility.

However, DPRP said the lack of clarity over the actual volume of imported petroleum products expected into the country has made production planning and inventory management increasingly difficult.

It added that keeping large quantities of fuel in storage without adequate information about future imports creates significant carrying costs and affects the efficient functioning of the market.

“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 explained that under the prevailing circumstances, products that exceed immediate domestic demand have to be redirected to regional and international markets.

It said this was responsible for the recent increase in its export volumes, stressing that the development was not caused by an inability to satisfy local demand.

According to the company, the exports are instead a response to excess inventory created by uncertainty in the domestic market, helping the refinery avoid unnecessary storage and financing expenses.

Dangote Refinery stressed that the increase in exports should not be interpreted as a reduction in its commitment to supplying the Nigerian market.

Rather, it described the exports as a necessary operational measure in a market where imported petroleum products continue to compete with locally refined fuel despite the availability of sufficient domestic refining capacity.

The refinery reiterated that it has the capacity, willingness and readiness to meet and exceed Nigeria’s petroleum product requirements.

It also said it would continue making significant investments to guarantee a dependable supply of fuel across the country.

DPRP further cautioned that any future supply shortages resulting from market distortions caused by excessive imports and difficulties faced by local producers in accurately forecasting demand should not be blamed on Dangote Refinery.

The company maintained that it has consistently demonstrated both the capacity and commitment required to serve the Nigerian market.

DPRP consequently called for greater transparency in petroleum product imports, improved coordination within the market and policies that encourage domestic refining.

It said such measures would strengthen Nigeria’s energy security, preserve foreign exchange and ensure that the country derives maximum economic value from its investments in local refining capacity.

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