Uncertainties as petrol imports rival Dangote refinery’s supply output

Regardless of expectations that the Dangote Refinery will remodel Nigeria’s power panorama and enhance provide, imported petrol continues to dominate the home market, highlighting a persistent dependency on overseas gas provides.

Transport information obtained by PREMIUM TIMES from motor tanker vessel actions between 1 October and 11 November reveals a considerable influx of petroleum merchandise by means of Lagos, Warri, Calabar, and Port Harcourt ports amid considerations over Nigeria’s home refining capability.

Information confirmed that Nigeria imported 1.5 million metric tonnes of petrol, an equal of about 2 billion litres, throughout the interval underneath evaluate.

A complete of 414,018 metric tonnes of diesel and 13,500 metric tonnes of jet gas had been additionally imported throughout the similar interval.

The price of gas imports displays the heavy monetary burden on Nigeria, straining the nation’s sources and exacerbating financial challenges.

The import information raises concern about home refining in Nigeria, particularly because the administration of the Dangote Refinery, positioned in Lekki, says the ability holds over 500 million litres of petrol in inventory.

Aliko Dangote, the refinery’s founder, not too long ago urged entrepreneurs and the Nigerian Nationwide Petroleum Firm Restricted (NNPCL) to halt imports and supply their provides regionally.

Nevertheless, the refinery’s operational capability stays a supply of concern.

Between September 15 and October 5, PREMIUM TIMES reported that the ability delivered solely 148 million litres of petrol—far beneath the 575 million litres sought by the NNPCL throughout the identical interval.

Implications

Nigeria’s continued dependence on imported gas is exacerbating financial challenges, notably the weakening of the naira.

Final Friday, the naira depreciated to N1,740/$ within the parallel market and N1,652/$ within the official foreign exchange market.

The surging import invoice is draining Nigeria’s overseas reserves, with an attendant affect on the soundness of the home forex.

The Dangote Refinery, with a capability of 650,000 barrels per day, was envisioned as a game-changer for Nigeria’s power sector.

However because it started operations, logistic and operational hurdles, coupled with entrepreneurs’ choice for cheaper imports, have slowed its affect.

The NNPC not too long ago said that whereas it prioritises home sourcing, financial issues usually tilt selections in favour of imports.

“Whereas NNPC prioritises sourcing merchandise from home refineries, that is contingent upon financial viability. If native provide is cost-effective, it is going to be most well-liked, however the identical precept applies to different entrepreneurs, who will even consider whole prices when deciding whether or not to purchase regionally or import,” NNPC’s Chief Company Communications Officer, Femi Soneye, mentioned in a press release.

Ports like Lagos, Warri, and Calabar stay hubs for gas imports, with tankers usually offloading petrol, diesel, and jet gas.

For example, Lagos recorded 555,121 metric tonnes of PMS supply in October.

Throughout the similar interval, Warri recorded 281,100 metric tonnes, Port Harcourt had 94,224.821 metric tonnes, and Calabar recorded 64,000 metric tonnes.

Professional speaks

Dan Kunle, a famend power professional, referred to as for pressing measures to deal with the challenges plaguing Nigeria’s oil and fuel sector.

He harassed the necessity for transparency in gas consumption information, urging the Nigerian Nationwide Petroleum Firm (NNPC) and the Midstream and Downstream Petroleum Regulatory Authority (MDRA) to reveal the precise day by day consumption figures for petrol (PMS) and diesel (AGO).

“We’d like forensic consultants to provide us the precise numbers. With out these, our losses by means of the importation of inflated volumes and poor-quality gas will proceed,” he mentioned.

Mr Kunle questioned the latest surge in gas imports, describing it as “curious” given the operational capability of the Dangote Refinery.

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He urged the Federal Authorities to collaborate with the refinery to make sure an ample provide of crude at optimum costs, thereby lowering dependence on imports.

“The Federal Authorities can conveniently conclude a win-win association with the Dangote Refinery to avoid wasting foreign exchange and improve native crude manufacturing,” he added.

Mr Kunle additionally famous the significance of enabling the refinery to scale up its capability from 400,000 barrels per day to 650,000 barrels per day, highlighting crude provide constraints as a essential bottleneck.

Talking about Nigeria’s non-functional state-owned refineries, he criticised the shortage of progress in reviving them and questioned their potential crude provide sources in the event that they finally resume operations. He additionally raised considerations concerning the excessive import volumes overwhelming Nigerian ports, resulting in elevated dealing with prices that in the end drive up gas costs.

He appealed to President Bola Tinubu to deal with these inefficiencies, including that “One thing very unhealthy is happening within the oil and fuel trade in Nigeria. Dangote Refinery shouldn’t be the issue however a giant answer. This large, deliberate importation should cease to permit our native refineries to outlive.”