Nigeria’s domestic refined fuel market experienced a sharp supply shift in June, with gasoline (PMS) imports more than tripling as the 700,000-barrel-per-day Dangote Petroleum Refinery diverted its output toward export markets to secure foreign currency.
According to monthly operational data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), daily gasoline imports surged to 18.1 million liters per day in June, up significantly from 5.6 million liters per day in May.
The import surge represents a reversal from May, when the $20 billion Lekki facility supplied roughly 90% of Nigeria’s total domestic gasoline consumption, briefly positioning the country near full fuel self-sufficiency.
FX Bottlenecks and Naira-for-Crude Supply Disruptions
Addressing the shift in supply strategy, Devakumar V. G. Edwin, Group Vice President at Dangote Refinery, confirmed that the plant is prioritizing international export contracts to meet its ongoing foreign currency obligations.
Edwin noted that the refinery faces two main operational constraints:
Inconsistent Naira-for-Crude Deliveries: The domestic currency crude supply framework introduced by the Federal Government and the Nigerian National Petroleum Company (NNPC) Limited has suffered from delivery delays. Edwin stated that the facility is receiving “very little” crude through the program, forcing the plant to buy foreign crude cargoes on the open market.
Central Bank FX Constraints: Because imported feedstock requires settlement in U.S. Dollars, selling finished products locally in Naira without direct access to central bank FX liquidity leaves the refinery unable to purchase replacement crude cargoes.
“We are exporting as much as possible,” Edwin stated in response to questions. “We are not able to get enough dollars from the central bank, and it doesn’t make any sense to be selling the products in naira and not being able to buy dollars. We need the dollars to buy our feedstock.”
Implications for National FX Reserves and Fuel Security
The return to heavy gasoline imports places renewed pressure on Nigeria’s foreign exchange reserves and domestic fuel distribution logistics.
While the CBN’s net foreign reserves recently crossed $40 billion (with gross reserves near $52.5 billion), a sustained reliance on imported refined products increases the demand for foreign exchange among private oil marketing companies.
Energy market analysts emphasize that resolving the supply bottleneck will require stabilizing the Naira-for-Crude framework. Guaranteeing a reliable supply of local crude to domestic refiners in local currency remains critical to reducing import dependency, preserving foreign exchange reserves, and securing stable fuel supplies for the domestic market.
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