Oil Import Surge Challenges Dangote Refinery’s Capacity

Over the weekend, at least four vessels carrying petroleum products arrived at Nigeria’s borders, raising questions about the capacity of the Dangote Refinery to meet local demand. According to a report by Punch, this development highlights a significant contradiction to earlier claims by Aliko Dangote, Africa’s richest man, that his refinery could service the entire country. For now, it appears unable to meet that expectation.

Oil traders in Nigeria have voiced concerns over the current production levels from the Dangote Refinery, suggesting that it falls short of the country’s daily fuel needs. While the refinery was initially expected to produce 25 million liters of gasoline daily, reports indicate that only about 10 million liters are being supplied. This shortfall has forced oil marketers to seek alternative sources of petroleum products.

A document from the Nigerian Ports Authority (NPA) revealed that a combined 123.4 million liters of Premium Motor Spirit (PMS), commonly known as gasoline, were delivered to two Nigerian seaports over the weekend. However, it remains unclear whether the shipment was intended for the Nigerian National Petroleum Company Limited (NNPCL) or independent oil marketers.

Expert Opinion on Dangote Refinery’s Struggles

In an interview with TVC News, Professor Yemi Oke, a renowned expert in Energy and Electricity Law at the University of Lagos, urged Nigerians to be patient with the Dangote Refinery. According to him, it is too early for the refinery to fully meet its ambitious target of producing 25 million liters of fuel per day. He expressed optimism that, over time, the refinery would stabilize and deliver consistent output, but warned against relying solely on the Dangote facility for the nation’s fuel needs.

“It’s okay that dealers are approaching other markets to source the product. It’s all about supply and demand,” Oke remarked, adding that more players are expected to enter the market in the coming months to supplement Dangote’s production.

The weekend saw a flurry of petroleum shipments arriving in Nigeria, further underscoring the nation’s reliance on imports. On Friday, a vessel carrying 35,000 metric tons of PMS landed at the ASPM jetty at 10:13 a.m. Later that day, a second cargo of 37,000 metric tons arrived at the same terminal at 3:37 p.m., followed by a third ship carrying 10,000 metric tons at 3:59 p.m., handled by Peak Shipping.

By Sunday morning, an additional 10,000 metric tons of PMS was delivered at the Eco Marine terminal in Calabar, bringing the total volume of petroleum products imported over the weekend to 92,000 metric tons.

These shipments, and the ongoing need to import fuel, point to the growing pressure on Nigeria’s oil supply chain. While the Dangote Refinery is seen as a long-term solution to Nigeria’s fuel challenges, its current output is insufficient to meet the country’s immediate needs. As the refinery ramps up production, Nigeria may need to continue importing petroleum products to bridge the gap between supply and demand.