The volume of premium motor spirit (PMS), or petrol, imported into Nigeria saw a sharp decline in the first half of October, coinciding with increased production at the Dangote Refinery. This shift marks a significant step towards Nigeria’s goal of reducing reliance on fuel imports.
According to data from S&P Global Commodity Insights, only 280,400 barrels of petrol and blend stock were imported into the country during the first week of October, compared to a weekly average of 1.3 million barrels in August. A single vessel delivered the fuel, highlighting the stark reduction in import activity. In the following week, ending October 13, another shipment of 290,567 barrels arrived in Lagos from Antwerp, Belgium.
This drop in imports signals the first major disruption to the traditional flow of gasoline from Europe to West Africa, as the Dangote Refinery ramps up domestic production. Prior to October, Nigeria regularly imported around 12 cargoes of petrol in the first half of both August and September. However, since October 8, no further gasoline shipments have been recorded.
Industry sources suggest that this decline in imports reflects the growing capability of the Dangote Refinery to meet a portion of Nigeria’s fuel needs. “There is no schedule for gasoline coming from Europe to Nigeria at the moment,” one trade source noted, adding that the refinery may be able to satisfy about a quarter of the country’s domestic demand.
Potential Fuel Deficit Looms
Despite this progress, there are concerns that Nigeria could still face fuel shortages if domestic production fails to meet the full demand. Traders have warned that without a steady supply of imported petrol, the market could experience a deficit, particularly as the Dangote Refinery continues to scale up its operations.
Full Deregulation of Nigeria’s Downstream Sector
The reduction in petrol imports follows a landmark shift in Nigeria’s downstream oil sector. Earlier in October, the federal government authorized petroleum marketers to source fuel directly from the Dangote Refinery, bypassing the Nigerian National Petroleum Company (NNPC) Limited. This move marks the full deregulation of the sector and signals the official end of the fuel subsidy, a costly measure that had been in place for years.
Since beginning operations in September, the Dangote Refinery has supplied the local market with petrol, with prices initially ranging between N850 and N900 per litre. However, as the NNPC is no longer the sole off-taker of petrol from the refinery, retail prices have risen, now ranging between N998 and N1,030 per litre.
A New Era for Nigeria’s Oil Industry
The Dangote Refinery, which has a capacity of 650,000 barrels per day (bpd), aims to meet Nigeria’s domestic fuel demand while also exporting to neighbouring African countries and the Caribbean. Once it reaches full operational capacity, the refinery is expected to significantly reduce the country’s reliance on imported fuel and reshape the petroleum industry in West Africa.
This shift represents a critical moment for Nigeria as it works to bolster local refining capacity and address long-standing challenges in its oil sector, including the heavy financial burden of fuel subsidies and the economic impact of import dependency.
