The Dangote Petroleum Refinery and Petrochemicals has suspended coastal sales of Premium Motor Spirit (PMS) to Lagos depot owners and importers as it redirects products to locations where imported petrol is less available, sources familiar with the refinery's operations have told Petroleumprice.ng.
“The suspension of coastal sales to Lagos is still ongoing. It is aimed at redirecting products to locations where imported products are unavailable. Lagos has quite some imported petrol,” a source said.
The suspension remains in effect amid growing concerns within the refinery over the volume of imported PMS entering the Nigerian market and its impact on domestic demand planning.
According to data available to the refinery, imported PMS accounted for approximately 43% of total petrol supplied into Nigeria in July. The refinery considers the volume significant enough to affect decisions on production, inventory and product distribution.
Lagos has received considerable volumes of imported petrol. The refinery is therefore directing available products towards other locations where imported supplies are less readily available, rather than sending additional coastal cargoes into the Lagos market.
The decision comes as Dangote Refinery questions the continued issuance of petroleum product import licences despite its stated capacity to meet and exceed Nigeria's domestic PMS requirements.
The refinery said uncertainty over the volume and timing of imported products makes it increasingly difficult to accurately forecast domestic demand. It has maintained product inventories and reserved volumes to ensure consistent supply, requiring substantial investment in storage, logistics and working capital.
However, holding large inventories becomes costly when the refinery has limited visibility over competing imports and cannot determine how much of its output will be absorbed locally.
Where products are not immediately required in the domestic market, the refinery said they have to be evacuated to prevent prolonged storage and financing costs. This has contributed to increased exports in recent months.
Dangote Refinery has maintained that the rise in exports does not reflect an inability to supply Nigeria. Instead, the refinery said it provides an outlet for volumes that cannot be efficiently absorbed by the domestic market under prevailing conditions.
The refinery has called for greater transparency around import licences and expected product inflows, alongside improved coordination across the downstream market.
For Lagos traders, the immediate effect is the continued suspension of coastal PMS sales from Dangote Refinery. The refinery's current approach is to allocate products towards markets where imported petrol is unavailable or less prevalent.
The development highlights the effect that continued petrol imports are having on the distribution strategy of Nigeria's largest domestic refinery, as locally refined products increasingly compete with imported supplies for market share.