Petrol import into Nigeria drops sharply in October as Dangote refinery ramps up production

The importation of premium motor spirit (PMS), commonly known as petrol, into Nigeria, has significantly declined in the first two weeks of October as the Dangote Refinery increased production to meet local demand.

This is according to S&P Global Commodity Insights ship-tracking report published on Tuesday.

Data from S&P Global Commodities at Sea shows that only 280,400 barrels of gasoline and blend stock were imported into Nigeria during the first week of October, ending on the 6th, via a single Medium Range (MR) vessel.

This marks a sharp decline from the weekly average of 1.3 million barrels recorded in August.

According to the report, in the week ending October 13, only one product tanker was reported to have shipped gasoline to Nigeria, carrying 290,567 barrels from Antwerp to Lagos.

These two October shipments are significantly lower than the 12 cargoes dispatched in the first half of both August and September.

Since October 8, no additional gasoline shipments have been brought into Nigeria.

The report indicates that the decline in import activity marks the first disruption to the previously well-established flow of fuel, primarily from Northwest Europe to West Africa, driven by the emergence of Dangote refinery’s domestic refining capacity.

“There is no schedule for gasoline coming from Europe to Nigeria at the moment. The rest will have to come from whatever is in the Offshore Lome market,” one trade source said, speculating that the new refinery might meet at most a quarter of domestic demand.

Meanwhile, the report notes that traders have warned that Nigeria could still face a substantial fuel deficit in the absence of imported supply.

What you should know

Following the sale of crude oil to the Dangote Refinery in Naira earlier this month, the federal government authorized petroleum marketers to lift petrol directly from the 650,000 barrels per day (bpd) refinery, bypassing the Nigerian National Petroleum Company (NNPC) Limited.

This move marks the full deregulation of the downstream sector, signaling the end of the costly but widely supported fuel subsidy.

Since September, the Dangote Refinery has supplied petroleum products to the market, with retail prices initially ranging between N850 and N900 per litre.

However, with the NNPC no longer serving as the sole off-taker of petrol from the refinery, retail prices have risen from approximately N998 to N1,030 per litre.

Upon reaching full operational capacity, the Dangote Refinery aims to meet local fuel demand while also exporting to neighbouring African countries and the Caribbean, thereby disrupting Nigeria’s petroleum importation industry.

SOURCE: NAIRAMETRICS