Dangote Refinery to Restrict Fuel Sales to Importers Amid Quality Concerns

Dangote Petroleum Refinery and Petrochemicals is considering restricting the sale of Premium Motor Spirit (PMS) to major marketers that continue importing petrol into Nigeria, according to sources familiar with the refinery's position. The proposed measure, which could take effect as early as this week pending further consultations and any last-minute intervention, comes amid concerns over product quality, market transparency and the integrity of products bearing the refinery's brand.

The refinery has reportedly raised concerns that some marketers are blending imported PMS of uncertain quality with products purchased from Dangote, making it difficult to distinguish between fuel supplied directly by the refinery and fuel subsequently handled by third parties. 'It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be blended with imports of uncertain quality and the resulting mixture still associated with the refinery,' a source familiar with the refinery's position said.

CPPE's Call for Regulatory Reform

The Centre for the Promotion of Private Enterprise (CPPE) has weighed in on the matter, urging the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to publish the country's fuel supply gap before granting import licences to petroleum marketers. In a policy brief titled 'Rising Petroleum Imports and the Future of Domestic Refining,' CPPE Director/CEO Muda Yusuf said import approvals must be tied to verified supply shortfalls.

Yusuf, a former Director-General of the Lagos Chamber of Commerce and Industry, argued that indiscriminate import licensing undermines Nigeria's domestic refining capacity, adding that import permits should be limited to the residual gap after local refiners have had an opportunity to meet demand. 'The concern is not with imports required to close a genuine and independently verified shortfall,' he said, quoted by CPPE.

'The policy concern arises where import permits are issued without a transparent demonstration that domestic refiners cannot meet demand at competitive terms.'

Yusuf proposed a 10-point framework, including publishing monthly supply-demand balances emerge from the Petroleum Industry Act, which allow import licences when there is a domestic supply gap. He also called for coordination between NMDPRA, NUPRC and the Federal Competition and Consumer Protection Commission (FCCPC) to ensure that import licences are not issued in a way that undermines local production.

'Support for domestic refining should not become protection for inefficiency, monopoly or poor service,' Yusuf said. 'The appropriate framework is domestic supply first, competition always, imports only for verified gaps.'

Background: Rising Imports Amidst Growing Local Capacity

The controversy unfolds at a time when Nigeria's domestic refining capacity has expanded significantly, with the Dangote Refinery – a 650,000-barrel-per-day facility in Lagos – now supplying petrol to the domestic market. Despite this, imports have surged. According to NMDPRA data cited by Yusuf, average monthly petrol imports rose from 4 million litres per day in May to 6 million in June and 7 million in July, pushing the import share to 1 per cent in July, up from How would a single source of truth about the world guide investors?