The refinery says imported petrol supplied 43% of Nigeria’s July market, making excess stock increasingly costly to hold despite its ability to meet domestic demand

The Dangote Petroleum Refinery and Petrochemicals on Wednesday, August 26, 2026, warned that it may increase exports of excess petrol as continued imports complicate domestic demand planning and make it increasingly expensive to hold large inventories in Nigeria.

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The refinery, based in Lagos, said imported Premium Motor Spirit, commonly known as petrol, accounted for approximately 43 per cent of fuel supplied to the Nigerian market in July, despite the refinery’s stated capacity to meet and exceed domestic requirements.

The warning comes amid fresh data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority showing that petrol imports increased in July, while domestic supply fell.

According to the NMDPRA’s July performance data, average daily petrol imports rose to 19.7 million litres from 18.1 million litres in June.

At the same time, domestic petrol supply declined by 20.6 per cent, from 32.5 million litres per day in June to 25.8 million litres in July. (Vanguard News)

Combined petrol supply consequently fell to 45.5 million litres per day in July, compared with 50.6 million litres per day in June.

Against that backdrop, Dangote Refinery said it had continued to maintain sizeable reserves and reserve product volumes to ensure reliable supplies to the domestic market.

The refinery said doing so had required substantial investments in storage facilities, logistics and working capital.

But it argued that the continued issuance of import licences, without sufficient visibility on how much petrol would enter the country, had made long-term inventory planning increasingly difficult.

“As a responsible energy provider, we have always endeavoured to keep adequate reserves to satisfy local demand at all times,” the refinery said in a statement.

“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 company said surplus petrol that could not be absorbed by the Nigerian market would therefore have to be moved to regional and international markets rather than remain in storage.

It stressed that increasing exports should not be interpreted as an indication that the refinery was unable to supply Nigeria.

“DPRP’s export volumes have increased in recent months, not because local demand cannot be met, but because excess inventory generated by market uncertainty must be evacuated to avoid unnecessary storage and financing costs,” it said.

The refinery’s position is significant because July’s official figures show that Dangote was already producing and exporting petrol while supplying almost all of its daily PMS output to the domestic market.

NMDPRA data showed that Dangote Refinery produced an average of 25.9 million litres of petrol daily in July, supplied 25.8 million litres per day to the domestic market and exported 3.4 million litres per day. Its PMS closing stock stood at 446.1 million litres at the end of the month. (TheCable)

The refinery operated at an average capacity utilisation of 71.09 per cent during July, according to the regulator.

The figures also highlight the changing structure of Nigeria’s fuel market.

While domestic refining has expanded substantially since Dangote Refinery began operations, imported products remain an important part of the country’s supply mix.

NMDPRA data showed that petrol imports had already surged by 207 per cent in June to 18.1 million litres per day, even as domestic petrol supply fell by 22 per cent that month. (TheCable)

The regulatory decision to continue approving imports has been linked to concerns about maintaining adequate supplies.

In June, NMDPRA approved third-quarter import permits for several oil marketers amid concerns over falling inventories and domestic output. (The Telegraph Nigeria)

Dangote Refinery, however, said the absence of greater transparency over expected import volumes was creating a difficult commercial environment for a large domestic producer.

“Maintaining large stock positions without clear visibility into import volumes imposes substantial carrying costs on the refinery and ultimately undermines efficient market operations,” the company said.

The refinery called for greater transparency and coordination within the downstream petroleum market, arguing that policies should support domestic refining, strengthen energy security and reduce Nigeria’s exposure to foreign exchange pressures associated with imported fuel.

It also warned against attributing any future petrol shortages to the refinery if market distortions caused by unpredictable import volumes undermine its ability to forecast domestic demand accurately.

The dispute comes at a time when Nigeria’s emergence as a refined petroleum products exporter is becoming increasingly visible beyond the domestic market.

The United States Energy Information Administration said Nigeria’s seaborne petroleum product shipments averaged 561,000 barrels per day in the second quarter of 2026, compared with an annual average of 79,000 barrels per day in 2023.

The agency attributed the sharp increase largely to the opening and ramp-up of Dangote Refinery. (EIA)

The EIA said the growth in Nigerian petroleum product exports had helped increase the country’s role in international fuel markets, with refined products increasingly moving to markets in Africa and Europe. (EIA)

For Dangote Refinery, the latest warning therefore reflects a delicate balancing act.

The company wants to maintain enough petrol in storage to protect Nigerian consumers from supply disruptions, while avoiding the financial burden of holding large volumes that may compete with imported products for market share.

The refinery said it remained committed to supplying the Nigerian market and was capable of meeting and exceeding the country’s petrol requirements.

Its proposed increase in exports, it maintained, is not a retreat from Nigeria but a practical response to an increasingly uncertain supply environment.

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The immediate challenge for policymakers and industry operators will be finding a balance between preventing fuel shortages through imports and ensuring that Nigeria’s growing domestic refining capacity can operate with sufficient certainty to serve the local market efficiently.