The Nigerian oil market is currently facing a substantial gap between local production and demand for Premium Motor Spirit (PMS), leading to continued imports to meet supply needs. Although the Dangote Petroleum Refinery, a $20 billion project, was expected to provide 25 million litres daily starting in September 2024, with an anticipated increase to 30 million litres in October, oil marketers report that this production volume hasn’t been fully realized. As a result, dealers are still relying on imported PMS, with an expected shipment of 42.3 million litres arriving next week to boost the domestic supply.
The market’s deregulation allows for a competitive environment, where marketers can source fuel either through imports or local refineries based on cost-effectiveness. This setup also means that marketers have the flexibility to bring in products without regulatory restrictions on sourcing, which has seen major marketers and NNPC itself engaging in imports to ensure stable fuel distribution across Nigeria.
In line with this, recent vessel arrivals have brought in approximately 123.4 million litres of PMS to Nigerian seaports, underscoring efforts to stabilize fuel availability nationwide. Although smaller modular refineries and the Dangote facility are active, their outputs have so far been insufficient to fully replace imports in meeting Nigeria’s robust fuel demand.
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