The Dangote Petroleum Refinery and Petrochemicals says it is considering stopping the sale of petrol to major marketers that continue to import petrol into Nigeria, amid concerns over product quality and the blending of imported fuel with products supplied by the refinery.
The proposed measure could take effect as early as this week, subject to further consultations and any last-minute intervention, according to sources familiar with the situation.
The immediate concern is that some marketers are allegedly blending imported PMS with petrol purchased from the Dangote refinery before distributing the resulting product to the market.
The refinery is concerned that such practices could make it difficult to distinguish between products supplied directly by Dangote and products subsequently blended 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 official at the $20bn Lekki-based plant, who spoke in confidence due to the lack of authorisation to speak on the matter, stated.
The refinery has also raised concerns about what it called a lack of a standard laboratory and adequate quality-control infrastructure for imported petroleum products, particularly the capacity to independently verify and certify the specifications of products entering the Nigerian market.
The latest development comes barely days after the Dangote refinery warned that rising petrol imports were forcing it to export excess stocks despite having sufficient capacity to meet Nigeria’s domestic demand.
The refinery said imported PMS accounted for approximately 43 per cent of fuel supplied into the Nigerian market in July, saying the continued issuance of petrol import licences had created uncertainty over domestic demand and made production and inventory planning increasingly difficult.
Dangote said it had consistently maintained sufficient inventory and reserved product volumes to guarantee steady supply to the Nigerian market, but argued that keeping large stocks indefinitely was becoming commercially unsustainable when it could not determine how much imported petrol would enter the country.
“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 said the surplus petrol that could not be absorbed by the domestic market would consequently have to be exported to regional and international markets.
The proposed restriction on sales to importing marketers now adds a new dimension to the refinery’s concerns, as Dangote moves from highlighting the commercial impact of rising imports to considering measures that would prevent marketers from sourcing its petrol while simultaneously importing competing products.
