Refiners oppose marketers’ plan to import petrol despite Dangote supply

The Crude Oil Refiners Association of Nigeria (CORAN) has strongly criticized a recent move by petroleum marketers to consider importing Premium Motor Spirit (PMS), commonly known as petrol, despite the availability of petrol from the newly operational Dangote Refinery.

This opposition comes at a time when Nigeria’s oil market is grappling with new price dynamics following the federal government’s full deregulation of the downstream oil sector.

In a statement released by CORAN’s Publicity Secretary, Eche Idoko, the association expressed its concerns, emphasizing the risks of importing substandard fuel products.

According to Idoko, past imports have often consisted of blended, lower-quality petrol sourced from Malta or Togo, which ultimately compromises the integrity of Nigeria’s fuel supply. “We assure you this regime will benefit the market far better than the old practice of importing substandard products,” Idoko stated, reflecting the association’s firm stance against the proposed importation.

This response from CORAN follows reports that approximately 141 million liters of PMS are en route to Nigeria via oil vessels, signaling marketers’ interest in foreign petrol despite the availability of locally refined fuel from Dangote’s 650,000-barrels-per-day refinery in Lagos.

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The push for imported fuel is seen as a reaction to dissatisfaction among marketers with the current pricing structure at Dangote Refinery.

Price Controversy Between Dangote and NNPC:

The tension between marketers and local suppliers surfaced after the Nigerian National Petroleum Company Limited (NNPCL) announced new petrol prices following its first successful lifting of PMS from the Dangote Refinery. The price of petrol is now set to range from N950 to N1,019.22 per liter, depending on the region. NNPCL noted that it acquired petrol from Dangote at a price of N898 per liter, a figure disputed by the refinery itself.

The divergence in pricing has led to concerns among petroleum marketers, many of whom argue that Dangote’s pricing structure leaves little room for competitive margins. This disagreement has fueled the interest in importing PMS, with marketers hoping to bypass what they perceive as a restrictive pricing model.

However, Idoko dismissed these concerns, stating that fears of a Dangote monopoly are unfounded. “The fear that Dangote will become a monopoly is being addressed. Dangote is already a member of our association, and with the Petroleum Industry Act (PIA) and relevant regulatory agencies in place, there is no chance of him monopolizing the market,” Idoko assured.

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Regulatory Measures and Import Testing:

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has also weighed in on the situation.

NMDPRA’s spokesperson, George Ene-Ita, emphasized that while marketers with import licenses are free to bring in PMS, stringent measures would be in place to ensure the quality of imported products.

According to Ene-Ita, all imported fuel would be subject to three mandatory tests to verify its quality before being approved for sale in the Nigerian market.

This regulatory framework is intended to ensure that imported fuel meets the same standards as locally refined products, preventing the circulation of substandard fuel that has plagued the Nigerian market in the past.

Dangote’s Vision for Self-Sufficiency:

Aliko Dangote, President of the Dangote Group, had earlier declared that his refinery’s operations would effectively end the need for Nigeria to import petrol.

Since its commissioning in May 2024, the Dangote Refinery has been positioned as a key player in Nigeria’s bid for fuel self-sufficiency, reducing reliance on foreign imports and boosting local production capacity.

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However, with some marketers pushing back against the pricing regime, the debate over local versus imported fuel has reignited. CORAN’s call for backward integration—investing in domestic refining capacity and infrastructure—aligns with Dangote’s vision for a self-sufficient Nigerian oil market.

The Road Ahead:

As Nigeria’s petroleum market navigates deregulation, pricing disagreements, and import concerns, the balance between local production and imports will be a key issue.

While CORAN remains steadfast in its support for local refining, the success of this strategy will depend on addressing the economic concerns of marketers and ensuring that local fuel is competitively priced.

For now, the debate continues, with all sides closely watching how Nigeria’s downstream sector evolves under full deregulation.