Nigeria’s petrol imports triple as Dangote Refinery prioritises exports

Nigeria’s petrol imports more than tripled in June as the Dangote Petroleum Refinery redirected a chunk of its output to export markets, highlighting growing strains in the country’s domestic fuel supply despite the presence of Africa’s largest refinery.

Latest data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed petrol imports rose to 18.1 million litres per day in June from 5.6 million litres per day in May, reversing recent gains in reducing the country’s dependence on imported fuel.

The increase comes as the 650,000-barrel-per-day Dangote Refinery, which supplied about 90 percent of Nigeria’s petrol demand in May, scaled back domestic sales in favour of exports to generate foreign currency needed to purchase crude oil.

BusinessDay’s analysis of NMDPRA data showed that domestic petrol supply fell to 32.5 million litres per day in June from 41.5 million litres per day in May, representing a 21.7 percent decline.

The drop in local supply, combined with the surge in imports, pushed Nigeria’s total daily petrol receipts to 50.6 million litres, up from 47.4 million litres in May.

According to the regulator, the increase was driven almost entirely by imported volumes.

“Total PMS receipts rose by seven percent from 47.4 million litres per day in May to 50.6 million litres in June, driven by a 207 percent surge in imports to 18.1 million litres, even as domestic supply fell by 22 percent to 32.5 million litres per day,” the NMDPRA said.

The figures represent a significant reversal from earlier in the year.

In January, domestic supply averaged 40.1 million litres per day, accounting for nearly 62 percent of total market supply, while imports stood at 24.8 million litres per day.

By February, imports had plunged to just 3 million litres per day, reinforcing expectations that the Dangote refinery was successfully displacing imported fuel cargoes.

Imports remained relatively subdued in the following months before surging again in June.

The refinery’s decision highlighted persistent challenges surrounding Nigeria’s naira-for-crude programme, which was introduced in 2024 to enable local refiners to buy crude in naira and reduce pressure on the country’s foreign exchange reserves.

According to Devakumar Edwin, vice president of Dangote Industries Limited, the refinery has been forced to prioritise exports because it cannot obtain sufficient foreign exchange to procure crude oil.

“We are exporting as much as possible,” Edwin said.

“We are not able to get enough dollars from the Central Bank, and it doesn’t make any sense to be selling the products in naira and not being able to buy dollars. We need the dollars to buy our feedstock.”

He added that the refinery was receiving “very little” crude under the naira-for-crude arrangement, limiting its ability to sustain domestic supply.

The development raises fresh questions over the effectiveness of the policy, which was designed to improve local refining, reduce fuel imports and stabilise the naira.

Ikemesit Effiong, senior partner and head of research at SBM Intelligence, warned that Nigeria could slip back into dependence on imported petrol if domestic refineries continue to prioritise exports.

“The NNPC’s failure to supply sufficient crude to Dangote may compel the refinery to import crude and sell refined products abroad, leaving the domestic market underserved and creating incentives for imports,” he said.

The situation illustrates the competing pressures facing the refinery. While domestic sales support Nigeria’s energy security, export sales generate the foreign currency needed to purchase feedstock in an environment where access to dollars remains constrained.

The Nigerian National Petroleum Company Limited (NNPC) and the Central Bank of Nigeria (CBN) had not commented on the refinery’s concerns at the time of filing this report.

The rebound in imports also comes despite Nigeria’s efforts to end decades of dependence on imported petroleum products following the commencement of operations at the Dangote Refinery.

For years, Nigeria exported crude oil while importing most of its refined fuel due to inadequate domestic refining capacity.

The commissioning of the Dangote Refinery was expected to reverse that trend, strengthen energy security and reduce pressure on foreign exchange reserves.

However, analysts said achieving those objectives will depend on the consistent implementation of the naira-for-crude policy, reliable domestic crude supply and improved access to foreign exchange for refinery operations. (BusinessDay)