The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has approved the importation of 830,000 metric tonnes of petrol by six marketers in the fourth quarter. This move extends a permit structure that has been in place since the start of the year, even as the Dangote refinery increases its domestic supply. The approved companies include Matrix Energy, AA Rano, AYM Shafa, NIPCO, Pinnacle Oil, and Bono Energy.
This allocation marks the fourth consecutive quarterly increase in petrol import permits this year. The six companies initially shared 180,000 tonnes in the first quarter, which later increased to 720,000 tonnes in the second quarter and over 800,000 tonnes in the third quarter. The annual total is expected to rise further, despite the regulator's data showing that imports are playing a decreasing role in the country's overall fuel supply.
According to NMDPRA figures, domestic refineries covered approximately 76.7 percent of petrol supply in the first quarter, while imports dropped by about 60 percent year-on-year to around 965.5 million litres over the same period. This trend has continued to favor local output, raising questions about the need for import permits. The Dangote refinery has been ramping up its production, potentially reducing the country's reliance on imported fuel.
The approval of new import permits coincides with an ongoing legal dispute between Dangote Petroleum Refinery and the NMDPRA. Dangote has asked the Federal High Court to void import licences, arguing that they are unnecessary given the country's domestic refining capacity. The case is scheduled to return to court on October 7. Dangote's position is that continued import permits undermine the purpose of its refinery, which was built to end Nigeria's reliance on imported fuel.
Industry analysts have noted a structural tension between the regulator's desire to maintain a supply buffer and the refiner's argument that this buffer is now redundant. The analyst noted that the permit structure allows marketers to fill gaps in the market, particularly outside the Lagos area, where Dangote has narrowed its direct sales. This has left marketers in other regions more reliant on alternative sources, including the regulated import channel.
The NMDPRA's decision to maintain the import permit structure may be seen as a way to ensure a stable supply of petrol, but it also raises concerns about the impact on local refining. Dangote's refinery has been increasing its production, but its offtake is geographically constrained, mainly serving the Lagos market. This has created an opportunity for importers to fill the gaps in other regions.
The ongoing dispute between Dangote and NMDPRA highlights the complexities of Nigeria's fuel supply landscape. As the country continues to navigate its transition to a more self-sufficient refining capacity, the role of imports is likely to remain a contentious issue. The outcome of the court case and the future of import permits will have significant implications for the country's energy sector.
Key points
- Dangote Petroleum Refinery has asked the Federal High Court to void import licences, arguing they are unnecessary given domestic capacity.
- Domestic refineries covered approximately 76.7 percent of petrol supply in the first quarter, while imports dropped by about 60 percent year-on-year.
- The NMDPRA has approved the importation of 830,000 metric tonnes of petrol by six marketers in the fourth quarter.
