Poor Quality: Dangote Refinery Takes Major Decision Against Fuel Importers as Landing Cost Crashes
- Dangote Petroleum Refinery said it may stop selling petrol to major marketers that continue to import fuel into Nigeria
- The refinery raised alarm over marketers allegedly blending imported PMS with Dangote-supplied petrol before distributing to the market
- The move comes days after Dangote warned that petrol imports, which made up 43% of July supply, were forcing it to export excess stock
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The Dangote Petroleum Refinery and Petrochemicals has threatened to cut off petrol sales to major marketers who continue importing fuel into Nigeria, citing concerns about product quality and the blending of imported petrol with its own output.
The restriction could take effect as early as this week, sources familiar with the matter said, though final consultations are still ongoing and a last-minute intervention remains possible.
Source: UGC
At the centre of the dispute is the alleged practice of mixing imported petrol (PMS) with fuel purchased directly from the Dangote refinery before it reaches filling stations.
The refinery says such blending makes it impossible to distinguish between its own high-quality product and whatever ends up in the hands of consumers.
"It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery," a senior official at the $20bn Lekki-based plant said, speaking on condition of anonymity.
-According to a report by Punch, the refinery also raised concerns about the absence of adequate quality-control infrastructure for verifying imported petrol entering the Nigerian market.
Dangote's wider fight against imports
The threat escalates a dispute that has been building for weeks. The Lekki refinery recently warned that the volume of imported petrol was forcing it to divert excess production to export markets, despite having enough capacity to supply Nigeria's full domestic demand.
According to the refinery, imported PMS accounted for roughly 43 per cent of fuel supplied to the Nigerian market in July.
It argued that the continued issuance of import licences by regulators had created serious uncertainty around domestic demand, making production planning and inventory management increasingly difficult, Vanguard reports.s
"As a responsible energy provider, we have always endeavoured to keep adequate reserves to satisfy local demand at all times.
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 refinery said.
Pricing gap adds to the tension
Data from the Major Energies Marketers Association of Nigeria's August 27 Energy Bulletin showed Dangote's petrol gantry price at N1,200 per litre, which was N22.32 below the estimated spot import-parity price of N1,222.32 per litre at that time.
Source: Facebook
By August 29, however, the refinery had raised its price to N1,265 per litre, putting it N42.68 above the earlier import-parity estimate.
Whether the import-parity figure itself had moved by that date was not immediately confirmed.
The proposed sales restrictions mark a shift in Dangote's approach, moving from public complaints about the commercial damage caused by competing imports to a direct commercial response aimed at marketers sourcing its fuel while simultaneously bringing in rival products from abroad.
Dangote Refinery-backed filling stations raise prices
Legit.ng earlier reported that Nigerian motorists are facing another petrol price increase after MRS and Dangote-backed filling stations raised their pump price to N1,310 per litre in Lagos and surrounding areas.
The latest increase represents a sharp rise from about N1,205 per litre, adding fresh pressure to households, transport operators and businesses already battling elevated operating costs.
Source: Legit.ng
