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The Nigerian National Petroleum Company Limited and other marketers imported more than two billion litres of Premium Motor Spirit (petrol), within 42 days from October 1 to November 11, 2024.
As dealers intensified the importation of PMS, Automotive Gas Oil (diesel), and Aviation Turbine Kerosene (jet fuel), domestic refiners opposed the development and called on the government to halt the issuance of import licences to marketers.
However, oil marketers insisted that the downstream petroleum sector had been deregulated, and as such, dealers were free to source products from wherever they found them cheaper.
They also stated that the costs of refined products had started reducing due to the deregulation of the sector, though some petrol users countered this claim.
“People are not noticing that prices are going down, primarily because there are no big announcements. Deregulation is in full swing and competition is the order of the day,” a major oil marketer, who spoke to one of our correspondents in confidence due to lack of authorisation to talk about the matter, stated on Friday.
When told that the cost of petrol was still above N1,000/litre and was N1,070/litre at filling stations operated by his company, the dealer replied, “Last week it was N1,080 (in some filling stations) if you were observant.
“You may not see N900. That is below cost. Plus stop expecting a permanent fixed price. It can come down and it can come up.”
Imports rise
Documents obtained by Saturday PUNCH show that during the 42-day period, the NNPC and its partners imported 1.5 million metric tonnes of PMS, 414,018.764 metric tonnes of diesel, and 13,500 metric tonnes of jet fuel. This is worth about N3tn or $1.8bn.
One metric tonne of PMS is equal to 1,341 litres. This means 1.5 million metric tonnes represents 2.011 billion litres of petrol.
Saturday PUNCH reports that the importation of petroleum products continues even as the Federal Government tries to stop importation through the naira-for-crude deal with Dangote and other local refineries.
The Organisation of Petroleum Exporting Countries said in a recent report that PMS imports into Nigeria surged in October compared to September.
The Dangote refinery began selling petrol in September, but it appears this has yet to reduce fuel imports, especially with the sector’s full deregulation.
A document that provided details of imported refined products during the review period showed that companies like Bovas, AA Rano, Matrix, Fatgbems, Deepwater, Raj, T-Time, Rainoil, Prudent, Chisco, Nepal, AYM Shafa, Northwest, Shorelink, and others received petrol from different vessels in Lagos, Warri, Calabar, and Port Harcourt.
Using the conversion rate of 1,164 litres per metric tonne for diesel, approximately 500 million litres of diesel were imported, while around 17 million litres of jet fuel were also brought in, using the conversion rate of 1,250 litres per metric tonne.
The document showed that tanker vessels carrying refined products have been arriving at Nigerian ports almost daily.
In October, NNPCL and its partners imported a total of 994,446.438 metric tonnes of PMS, with Lagos receiving 555,121.617 metric tonnes, Warri 281,100 metric tonnes, Port Harcourt 94,224.821 metric tonnes, and Calabar 64,000 metric tonnes.
A total of 285,518.764 metric tonnes of diesel was also imported, with Lagos receiving 162,500 metric tonnes, Warri 58,500 metric tonnes, Port Harcourt 56,018.764 metric tonnes, and Calabar 8,500 metric tonnes.
Between November 1 and November 11, a further 358,083 metric tonnes of PMS, 112,500 metric tonnes of diesel, and 13,500 metric tonnes of aviation fuel were discharged at Nigerian ports.
On October 10, the NNPC received 60,590.187 metric tonnes of PMS via the Navig8 Honor ship at Pinnacle Terminal.
On October 16, another 38,083 metric tonnes of PMS were delivered by the CL Agatha Christie ship.
On October 18, four ships — Largo Sea, Binta Saleh, CL Game Ousten, and Berners — delivered a combined 97,000 metric tonnes of PMS.
Additionally, AA Rano imported 18,860 metric tonnes of PMS and 20,000 metric tonnes of AGO via ships Binta Saleh and LAUSU at its terminal.
Other notable receivers included Matrix, Bovas, T-Tank, Emadeb, Raj, Menj, and TS Logistics.
Dependent producer
Despite being a major oil producer, Nigeria has for years relied on fuel imports due to a lack of sufficient domestic refining capacity.
President Bola Tinubu had expressed hopes that the recent shift to naira-based crude oil and refined product sales would bring greater stability to the downstream sector.
“Whatever solution we proffer in crude oil and refined product sales in naira should not take us back to our experience over the last 40 years.
“There can be cost and revenue adjustments in the oil sector, but the key issue is that the government will not return to the old ways of doing things,” the president said at a recent meeting with stakeholders.
The President urged stakeholders to focus on ensuring adequate domestic supply of petrol and other petroleum products to end Nigeria’s dependency on imports.
Finance Minister and Coordinating Minister of the Economy, Wale Edun also announced that the government would earn about N700bn monthly from the sale of crude in naira and the subsidy removal policies, a significant increase compared to the $600m previously spent on fuel imports.
At the same meeting, the President and Chief Executive Officer of the Dangote Group, Aliko Dangote, said his refinery currently holds more than 500 million litres of fuel in reserve, after supplying 400 million litres to the domestic market. Dangote also highlighted the potential for collaboration with other refineries managed by the NNPC to meet an estimated 32 million litres of local petrol needs.
Refiners kick
Meanwhile, the Crude Oil Refinery Owners Association of Nigeria has urged the Federal Government to stop granting import licences to petroleum traders for refined products, warning that some international traders are attempting to use Nigeria as a dumping ground for low-quality products rejected in Europe.
The Publicity Secretary of CORAN, Eche Idoko, in an interview with Saturday PUNCH, said there should be backward integration, adding that products being produced locally should no longer be imported except there were shortfalls.
He said, “International traders are using local traders as instruments in their trade war because they are interested in the Nigerian market but do not want to invest in it.
“The continuous issuance of import licences will only harm our industry. The government must protect the nascent refining industry that is emerging in Nigeria, and they can do this by refraining from issuing import licences to these conglomerates, who are only interested in making Nigeria a market for their substandard products.”
Idoko further pointed out that the Petroleum Industry Act stipulates that import licences should not be granted for products that can be refined domestically, stating, “PIA clearly states that for any product for which we have domestic refining capacity, they should stop issuing licences.”
NNPCL continues imports
During the Nigerian Association of Petroleum Explorationists conference on Monday, NNPC’s Group Chief Executive Officer, Mele Kyari, had said, “Today, NNPC does not import any product; we are taking only from domestic refineries.”
However, the NNPC spokesperson, Olufemi Soneye, in a statement on Thursday, clarified that it did not mean the NNPC had stopped fuel importation.
Soneye said the state-owned petroleum company would still source for products from outside the country when there was the need for it.
He said, “The GCEO’s statement, ’Today, NNPC does not import any product; we are only taking from domestic refineries’, should not be construed to imply that NNPC Ltd is obligated to be the sole off-taker of any refinery or that we will no longer import fuel.
“While NNPC prioritises sourcing products from domestic refineries, this is contingent upon economic viability. If local supply is cost-effective, it will be preferred, but the same principle applies to other marketers, who will also evaluate total costs when deciding whether to buy locally or import.”
According to Soneye, economic viability will guide NNPCL in its decisions on whether to source refined petroleum from local refineries or import, noting that Kyari had not announced the end of fuel importation.
He added, “It is also essential to note that the authority to grant import licences resides with the Nigerian Midstream and Downstream Petroleum Regulatory Authority, as mandated by the Petroleum Industry Act. NNPC Ltd does not have control over more than 30 per cent of the market, as stipulated by the PIA, which aims to prevent monopolies.
“The law promotes a free-market system where competition drives efficiency and cost reduction, ensuring that consumers benefit. Domestic refiners must compete on price and value, as patronage cannot be legislated in a deregulated sector.”
While speaking at the conference on Monday, Kyari said, “There are too many claimants out there, that the NNPC does not want to sell crude to the refinery in naira as a form of sabotage. Far from it! As a matter of fact, it makes no difference to us because if you sell crude to the domestic refinery in naira and you buy the product in naira from the domestic refinery, it’s a net zero gain.
“You lose nothing, you probably gain also nothing. Otherwise, whatever you do, you still have to source foreign exchange to import if you have to import. So, if you stop the import and sell in naira, what you are simply doing is just a substitution. It’s a settlement platform and we must commend the President for bringing this initiative.
“What it will do to our country is that the biggest source of FX pressure in our country is the import of PMS. It’s the highest value. That means if you can take that under control, it means that speculation around the naira to the extent of those FX that is required for domestic product supply will be eliminated.
“That means speculation will go, you would have controlled inflation, and you would have controlled the FX pressure because you would have settled the exchange rate for 50 per cent of your imports. This is a very great initiative. I should commend the President for bringing this initiative.”
More import licences
Meanwhile, insiders said licences for the importation of an additional 2.5 million metric tonnes of PMS between now and December have been granted, adding that 2.5 million metric tonnes, which is about 3.5 billion litres of the product are to be discharged in Lagos, Warri, Port Harcourt, and Calabar.
Saturday PUNCH reports that some petroleum marketers said they might not import PMS again following the deal to begin direct lifting from the Dangote refinery.
Officials of the Independent Petroleum Marketers Association of Nigeria said if they could get the product from the $20bn refinery, there would be no need to go outside the country in search of petrol any longer.
In the past weeks, the President of the Dangote Group, Alhaji Aliko Dangote, and petroleum marketers went up in arms after the former accused them of not patronising his refinery.
Both IPMAN and the Petroleum Products Retail Outlet Owners Association of Nigeria stated that it was cheaper to import than to buy from Dangote refinery.
PETROAN categorically told our correspondent that it had reached an agreement with international traders to import petrol and sell at prices lower than that of Dangote and the Nigerian National Petroleum Company Limited.
However, it appears the marketers are making a U-turn and may jettison the plan to import fuel into the country having agreed with the 650,000-capacity refinery.
Speaking in an interview with our correspondent, the IPMAN Vice President, Hammed Fashola, said if the product was available locally, there was no need for importation anymore.
Fashola recalled that IPMAN had made it clear right from the start that it would support the Dangote refinery and that the new agreement would be a win-win for all.
“We have set it from the onset that we are ready to work with Dangote. We need to encourage him. We are very conscious of that. Based on this, we believe it is going to be a win-win situation for both Dangote and IPMAN. I am sure the price will be reasonable. We are just after the price. Once the price is okay for us, we are good to go,“ he stated.
Asked to state in clear terms if it means IPMAN would no longer pursue the licence to import petrol, Fashola replied, “Once we have it as we need it, what is the need to import again?”
