By Oil marketers have raised concerns that the volume of Premium Motor Spirit (PMS), commonly known as petrol, produced by the Dangote Petroleum Refinery is currently insufficient to meet Nigeria’s domestic needs. As a result, marketers announced plans on Tuesday to import petrol to supplement the supply from the $20 billion Lekki-based refinery.
Marketers and the Trade Union Congress (TUC) have urged the refinery to increase production. Reports suggest that the refinery is producing around 10 million liters of petrol daily, far below the 25 million liters it had initially promised.
The NNPC has attributed the recent resurfacing of petrol scarcity in Lagos and other parts of Nigeria to disruptions in product movement caused by inclement weather conditions.
On September 15, when the refinery began distributing PMS to domestic marketers, the Nigerian National Petroleum Company Limited (NNPCL) announced it was set to load 16.8 million liters of petrol from the Dangote facility. This was lower than the previously announced figure of 25 million liters per day.
Earlier, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) disclosed that the refinery would supply 25 million liters daily starting in September, with plans to increase output to 30 million liters from October. The NMDPRA stated that a crude oil supply agreement in local currency had been reached between the NNPC and Dangote Refinery.
Aliko Dangote, billionaire and chief executive officer of Dangote Group, at the annual meetings of the International Monetary Fund and World Bank in Morocco in October 2023.
However, on Tuesday, oil marketers and the TUC expressed frustration, noting that the refinery was not yet producing the promised volumes. They called for increased production or for dealers to import petrol to bridge the gap. TUC National President, Festus Osifo, stressed the need for alternative sources of refined petrol to meet Nigeria’s daily demand, which currently stands at around 40 million liters.
“If the refinery’s output is below 15 million liters per day, it is not enough. Until Dangote can meet the demand, we need to source the remaining supply from other places to ensure availability,” Osifo said.
An industry insider confirmed that the refinery is refining less than 10 million liters of petrol daily, and there are no incoming shipments from NNPCL to supplement supply. The insider warned that while the high price of petrol has reduced consumption, widespread fuel shortages could occur if the situation worsens.
Hammed Fashola, National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), revealed that the association plans to begin importing PMS soon, citing the acquisition of two tank farms in Calabar and Lagos. He emphasized the importance of maintaining competition in the market to prevent monopolies and ensure consumers have alternative sources of fuel.
Nigerian President Bola Tinubu in a meeting with members of his cabinet.
Professor Adeola Adenikinju, an economist at the University of Ibadan, highlighted the importance of competition for consumer welfare, noting that marketers would opt for imports if local production was either insufficient or too expensive. “Competition between local suppliers and imported products will lead to efficiency and lower prices, benefiting consumers,” Adenikinju said.
Meanwhile, about 335 trucks belonging to independent marketers have begun loading PMS from NNPCL, with petrol prices ranging from N995 to N1,040 per liter, depending on the region. Despite this, further discussions between oil marketers and Dangote refinery officials are ongoing to resolve the supply issues.
In the wake of the revelation by the Dangote Group on its frustration in accessing crude oil, Nigerians on social media have called out International Oil Companies (IOCs) on sabotaging the process. Civil Society organizations, Nigerian students and social media users have expressed their displeasure, stating that the Federal Government must protect the Dangote refinery.
