The Nigerian National Petroleum Company (NNPC) has instructed oil marketers to stop importing petrol, citing the Dangote Refinery’s ability to meet domestic demand.
According to BusinessDay, this directive was issued during a high-level meeting in Abuja, attended by NNPC Group CEO Mele Kyari, representatives from the Major Oil Marketers Association of Nigeria (MOMAN), the Depot and Petroleum Products Marketers Association (DAPPMAN), as well as stakeholders from companies such as 11 Plc, Matrix, AA Rano, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Sources close to the meeting revealed that the NNPC made it clear that all petrol supplies would now be contingent on clearance from the Dangote Refinery.
An official confirmed, “NNPC emphasized that no marketer would be allowed to import petrol unless they receive specific approval linked to Dangote’s capacity.”
While strategic, the decision has raised concerns among marketers. Some questioned whether the Dangote Refinery could consistently supply the market and meet the demands of Nigeria’s extensive distribution network.
There were also worries about the refinery’s logistical capabilities and its ability to cope with fluctuating demand. Additionally, a key point of contention was Dangote Refinery’s proposed advance payment model for petrol, in contrast to the traditional post-delivery payments. Marketers, particularly smaller ones, expressed concerns that the new payment structure would strain their finances.
A stakeholder commented, “Paying upfront creates serious cash flow challenges, especially for smaller players who are used to the post-delivery payment system that better suits their liquidity.”
Since it began operations in January, the Dangote Refinery has sold diesel, jet fuel, and other products globally, primarily through traders like Vitol, Trafigura, and BP. Initially, it had an exclusive agreement with NNPC for gasoline, but by November 4, it began selling directly to local marketers.
The refinery claims its gasoline meets high-quality standards, with a sulfur content below 10 ppm, a marked improvement over the previous 500 ppm standard for Nigeria.
A source noted, “There’s a price difference between Dangote’s premium petrol (10 ppm) and imported petrol (50 ppm).”
On October 29, Dangote expressed frustration over the refinery’s stockpile of over 500 million liters (around 3.1 million barrels) of fuel, which he claimed was being wasted due to the influx of low-quality, illicit imports that undercut his prices. He threatened to sue NNPC for continuing to import fuel.
Documents seen by BusinessDay showed that from October 1 to November 11, 2024, NNPC and its partners imported 1.5 million metric tonnes of PMS, 414,000 metric tonnes of diesel, and 13,500 metric tonnes of jet fuel, amounting to roughly N3 trillion ($1.8 billion).
“There’s a big question about where marketers are sourcing their dollars for petrol imports,” a senior oil executive remarked.
Further documents revealed that companies like Bovas, AA Rano, Matrix, Fatgbems, Deepwater, Raj, T-Time, Rainoil, Prudent, and others received petrol from vessels at various ports in Lagos, Warri, Calabar, and Port Harcourt.
Petrol Importation Debate
Speaking at the 42nd Nigerian Association of Petroleum Explorationists (NAPE) conference on November 12, Kyari stated that NNPC had ceased importing fuel and was now sourcing products exclusively from local refineries.
Kyari said, “Today, NNPC does not import any product. We are taking only from domestic refineries.”
However, in a subsequent statement, NNPC clarified that Kyari had been misquoted. The company said his words were taken out of context and emphasized that while NNPC prioritizes local refinery products, it will still import fuel if local supply is not economically viable. Marketers, too, will assess costs when deciding whether to source locally or continue importing.
