The Nigerian National Petroleum Company Limited has ceased importing refined petroleum products and is now sourcing fuel from the Dangote Petroleum Refinery and other local refineries.
NNPC’s Group Chief Executive Officer, Mele Kyari, made this announcement on Monday at the ongoing conference of the Nigerian Association of Petroleum Explorationists in Lagos, themed ‘Resolving the Nigerian Energy Trilemma: Energy Security, Sustainable Growth and Affordability.’
This development comes amid claims by some petroleum marketers that they would continue to import petroleum products but sell them at a price lower than that of the $20bn Dangote refinery.
In August, President Bola Tinubu stated that the country spent an average of N2tn monthly on fuel imports.
According to Tinubu, the introduction of compressed natural gas (CNG) into the country would save “over N2tn a month used to import PMS and AGO and free up our resources for more investment in healthcare and gas education.”
The President’s statement implies that the country spends approximately N24tn annually on importing petrol and diesel, excluding aviation fuel, kerosene, and gas.
Despite being an oil-producing nation, Nigeria has relied on imported fuels for years due to insufficient local refining capacity.
Speaking at the NAPE Conference, Kyari revealed that the NNPC is no longer importing fuel and is now sourcing only from domestic refineries.
“Today, NNPC does not import any product, we are taking only from domestic refineries,” he stated.
It’s important to recall that NNPC was initially the sole off-taker of Dangote PMS until the Federal Government allowed other marketers to source directly from the refinery.
Kyari dismissed claims that NNPC was sabotaging the Dangote refinery.
Addressing concerns about domestic refining, he said there had been several media reports suggesting that NNPC was hindering local refineries by not supporting them sufficiently.
“The point is very far from it, and I’m going to speak to it straight. We are very proud part-owners of Dangote refinery, no doubt about it. We saw an opportunity that there is a clear market for at least 300,000 barrels of our production; we know that as time moves on, people will start struggling to find markets for their production.
“It will happen, it’s already happening. Oil is found, as you know, in many unexpected locations across the world and people have choices. Therefore, we saw an opportunity to log supply to the domestic refinery, not just Dangote but any other refinery that operates in the country, so it was a very informed business decision.
“Therefore, from day one, we knew that it is to our benefit to supply crude oil to the domestic refinery, so we don’t need to be persuaded; we don’t need anyone to talk to us, there is no need for any pressure from the streets for us to do this. We are already doing this,” he clarified.
On the topic of Nigeria needing to domesticate its oil, Kyari noted that Nigerian crude is “Lamborghini crude,” meaning the products derived from it would be expensive.
He argued that the issue of high-quality fuel is relative, as many refineries avoid Nigerian crude due to its price.
Kyari shared that some global traders buy Nigerian crude and blend it with lower-quality fuels to reduce costs.
“We should never forget that Nigerian crude is ‘Lamborghini crude.’ If we choose that every product that we have in this country must come from domestic production, then we must deal with pricing. Otherwise, out there in the global market, everybody buys Nigerian crude and blends it with dirtier crude to process. A lot of you will confirm this. So, no one takes Nigerian crude except one or two refineries that I know. Straight processing of Nigerian crude, nobody does this because you do have a gap in value if you do this.
“Therefore, as a country, and I believe this strongly also, that we must process all the crude that we produce in the country to the optimum. You can do intermediate products and sell to the market, you are still adding value. You don’t have to sell gasoline that is coming from Nigerian production.
“You can do something different so you can process it domestically, but it’s going to be high quality. As we all know and it’s very clear in the media that we are selling high-quality products, that’s very true but you need not do this. You are driving a Keke-Napep and you want Lamborghini fuel, you do not need it. So, the quality issue is a relative thing, it’s by geography, by location, and we will do everything possible to make sure that we domesticate this.
“Today, NNPC does not import any product, we are taking only from domestic refineries. But I also know that we are working jointly with the government to make sure that we manage the issue around prices if we have to source all our supply from the domestic market. It will be an issue and we are already resolving it. I can confirm that substantial work has been done and this will no longer be an issue.”
