NNPCL, after criticisms, stops fuel import as it buys directly from Dangote Refinery

By OUR REPORTER

“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.”

The Nigerian National Petroleum Company Limited (NNPCL) has ended importing refined petroleum products replacing its foreign sources with the Dangote Refinery and other domestic modular refineries all of which were founded with the help of the Muhammadu Buhari administration (2015-2023).

NNPCL’s Group Chief Executive Officer, Malam Mele Kyari, made this announcement on Monday, November 11, during the Nigerian Association of Petroleum Explorationists (NAPE) conference in Lagos, themed “Resolving the Nigerian Energy Trilemma: Energy Security, Sustainable Growth, and Affordability.”

He was talking after some Nigerians criticised its corporation and Independent Petroleum Marketers Association of Nigeria (IPMAN) for choosing fuel imports over patronising own country’s privately owned Dangote Refinery.

This shift comes amid ongoing discussions, with some petroleum marketers indicating plans to import fuel and potentially offer it at lower prices than the Dangote Refinery’s $20 billion operations.

In August, President Bola Tinubu revealed that Nigeria was spending approximately N2 trillion per month on fuel imports.

Tinubu highlighted that the introduction of compressed natural gas in Nigeria could save over N2 trillion monthly, which could then be redirected toward healthcare, education, and other essential investments.

Despite being a major oil producer, Nigeria has historically depended on fuel imports due to limited refining capacity.

However, Kyari confirmed at the NAPE conference that NNPCL has now halted fuel imports entirely and is procuring supplies exclusively from local refineries.

“Today, NNPCL does not import any product, we are taking only from domestic refineries,” he revealed.

The NNPCL was initially the exclusive off-taker of petrol from the Dangote Refinery until the Federal Government recently allowed other marketers to source fuel directly from the facility.

NNPCL’s Group Chief Executive Officer, Mele Kyari, addressed claims that the company was undermining the Dangote Refinery, refuting accusations that NNPCL was acting to hinder domestic refining efforts.

Kyari clarified that media reports suggesting NNPCL’s opposition to supporting local refineries were unfounded.

“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.

Addressing calls for Nigeria to refine its oil domestically, Mele Kyari described Nigerian crude as “Lamborghini crude,” suggesting it commands a premium price.

Kyari explained that while Nigerian crude is high-quality, this often makes it too expensive for many refineries, which opt for cheaper alternatives.

He also noted that some international traders purchase Nigerian crude only to blend it with lower-grade fuels to reduce costs, thereby compromising its quality.

He said, “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, NNPCL 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.”