Dangote Refinery says imported PMS creates uncertainty

Human Rights Writers Association of Nigeria (HURIWA) has condemned the latest increase in the price of Premium Motor Spirit (PMS) and demanded a forensic audit of funds reportedly spent on the rehabilitation of Nigeria’s public refineries.

The group described the increase as insensitive to the economic hardship confronting millions of Nigerians.

The National Coordinator, Emmanuel Onwubiko, in a statement issued yesterday, said the N15 increase by Dangote Petroleum Refinery came at a time international crude oil prices had recorded significant declines.

The refinery had earlier announced the increase in its petrol gantry price from N1,185 to N1,200 per litre, effective yesterday (Wednesday).

HURIWA said the latest adjustment made it necessary for the government and industry regulators to explain the factors behind successive petrol price increases.

Meanwhile, the Dangote Petroleum Refinery and Petrochemicals (DPRP) has raised concerns over the continued issuance of petroleum product import licences despite its claim that it has the capacity to meet and exceed Nigeria’s domestic Premium Motor Spirit (PMS) requirements.

According to market data, imported PMS accounted for approximately 43 per cent of fuel supplied to the Nigerian market in July, raising questions about the necessity of continued large-scale imports given the availability of substantial domestic refining capacity.

It said the volume of imported PMS entering the market was creating uncertainty in domestic demand planning and inventory management, despite its commitment to maintaining adequate supplies for the Nigerian market.

According to the refinery, it has consistently maintained sufficient inventory levels and reserved product volumes since commencing operations to guarantee a steady supply, which has required significant investment in storage, logistics, and working capital.

However, it said the lack of transparency regarding the actual volume of products expected to be imported into the country was making production and inventory planning increasingly difficult.

Maintaining large stock positions without clear visibility on import volumes, the refinery added, imposes substantial carrying costs and undermines efficient market operations.

The refinery explained that surplus products not immediately absorbed by the domestic market had to be exported to regional and international markets to avoid unnecessary storage and financing costs.

It said the increase in its export volumes in recent months was therefore not due to an inability to meet domestic demand, but an operational response to excess inventory arising from uncertainty over the volume of imported products entering the country.

Dangote Refinery stressed that the rise in exports should not be interpreted as a reduction in its commitment to the Nigerian market, arguing that imported products continue to compete with locally refined fuel despite the availability of sufficient domestic refining capacity.

The company reiterated that it remained ready, willing and able to meet and surpass Nigeria’s petroleum product requirements, while continuing to invest in reliable supply across the country.

It further warned that any supply shortfalls resulting from market distortions caused by excessive imports and from local producers’ inability to accurately forecast domestic demand should not be attributed to the refinery.

DPRP called for greater transparency and improved market coordination, alongside policies that support local refining, strengthen energy security, conserve foreign exchange and maximise the economic benefits of Nigeria’s investments in domestic refining capacity.