The Nigerian National Petroleum Company Limited and various oil marketers imported more than two billion litres of Premium Motor Spirit between October 1 and November 11, 2024, marking a significant import surge.
The total amount of refined products brought in during this 42-day period included 1.5 million metric tonnes of petrol, 414,018.764 metric tonnes of diesel, and 13,500 metric tonnes of aviation fuel. This translates to a value of approximately N3 trillion or $1.8 billion.
As oil marketers ramped up imports of PMS, Automotive Gas Oil (diesel), and Aviation Turbine Kerosene (jet fuel), local refiners voiced strong opposition.
They called on the government to cease issuing import licences to marketers. In response, oil marketers argued that the downstream petroleum sector had been fully deregulated, giving them the liberty to source products from wherever they found them at lower costs.
A major oil marketer, speaking anonymously due to lack of authorization, commented, “People are not noticing that prices are going down, primarily because there are no big announcements. Deregulation is in full swing and competition is the order of the day.”
Despite claims of falling fuel prices, some petrol consumers disputed the marketer’s assertion.
When confronted about petrol still costing over N1,000 per litre, with some filling stations charging N1,070 per litre, the marketer responded, “Last week it was N1,080 (in some filling stations) if you were observant. You may not see N900. That is below cost. Plus, stop expecting a permanent fixed price. It can come down and it can come up.”
Despite the claims of price reductions, the country’s continued reliance on fuel imports remains evident.
Documents reveal that between October 1 and November 11, the NNPC and its partners imported significant quantities of refined products. For example, 2.011 billion litres of petrol were brought in, as one metric tonne of PMS is equal to 1,341 litres.
In total, over 1.9 million metric tonnes of petroleum products were imported, including 994,446.438 metric tonnes of PMS in October alone.
Other products, such as 285,518.764 metric tonnes of diesel and 358,083 metric tonnes of PMS in November, were also brought into the country.
The fuel imports continued to flow into Nigerian ports daily, with various vessels docking in cities such as Lagos, Warri, Calabar, and Port Harcourt.
Companies including Bovas, AA Rano, Matrix, and others received shipments during the period, adding to the growing influx of foreign refined products.
Despite being a major oil producer, Nigeria has struggled to produce enough refined petroleum domestically, forcing the country to rely on imports.
President Bola Tinubu has been vocal about his administration’s desire to shift away from this dependency. He recently expressed optimism that the move toward naira-based crude oil and refined product sales would stabilize the downstream petroleum sector.
Tinubu remarked, “Whatever solution we proffer in crude oil and refined product sales in naira should not take us back to our experience over the last 40 years.” He further emphasized that while adjustments to costs and revenues may occur, the government’s ultimate goal was to ensure the country no longer depended on fuel imports.
The finance minister, Wale Edun, added that the government expected to earn about N700 billion monthly from the new naira-based transactions, a stark contrast to the previous $600 million spent annually on fuel imports.
President of the Dangote Group, Aliko Dangote, also highlighted that his refinery held over 500 million litres of fuel in reserve after supplying 400 million litres to the domestic market.
He reiterated that his refinery, in collaboration with other local refineries, could meet an estimated 32 million litres of Nigeria’s local petrol needs.
Meanwhile, the Crude Oil Refinery Owners Association of Nigeria called for the government to stop issuing import licences for products that could be refined domestically, citing concerns that some international traders were attempting to flood the Nigerian market with low-quality products rejected in Europe.
CORAN’s Publicity Secretary, Eche Idoko, stressed that Nigeria should prioritize the backward integration of its refining industry and cease the importation of products that could be produced locally.
“International traders are using local traders as instruments in their trade war because they are interested in the Nigerian market but do not want to invest in it,” Idoko said.
However, NNPC’s Group CEO, Mele Kyari, appeared to downplay the impact of fuel imports, stating, “Today, NNPC does not import any product; we are taking only from domestic refineries.” But NNPC spokesperson Olufemi Soneye clarified the statement, saying it did not imply that fuel importation had stopped altogether. Soneye explained that while NNPC prioritizes sourcing products from local refineries, they would continue importing when local supply was economically unviable.
Soneye further emphasized that the decision to grant import licences rested with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, not NNPC. He also pointed out that the Petroleum Industry Act ensures a free-market environment, where competition drives efficiency and cost reduction, benefiting consumers.
While discussions on local refining continue, there are indications that oil marketers may ease off on imports following the agreement to purchase fuel from the Dangote refinery.
Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, confirmed that if Dangote’s refinery could meet local demand, there would be no need for further imports.
Fashola said, “We have set it from the onset that we are ready to work with Dangote. We need to encourage him. Based on this, we believe it is going to be a win-win situation for both Dangote and IPMAN.”
In conclusion, while deregulation and domestic refining are seen as the long-term solutions to Nigeria’s fuel dependency, the country continues to face challenges in ensuring adequate supply of refined products.
The shift to local sourcing remains a complex issue, with both local and international stakeholders navigating the evolving landscape of the Nigerian oil market.
