NNPCL Halts N24tn Fuel Importation, Sources Exclusively from Local Refineries
The Nigerian National Petroleum Company Limited (NNPCL) has announced that it has halted all imports of refined petroleum products and is now sourcing fuel exclusively from local refineries, including the Dangote Petroleum Refinery.
This decision, disclosed by NNPCL’s Group Chief Executive Officer, Mele Kyari, during the Nigerian Association of Petroleum Explorationists (NAPE) conference in Lagos, is anticipated to save the nation approximately N24 trillion annually—a substantial expense previously incurred from foreign imports.
“Today, NNPC does not import any product; we are taking only from domestic refineries,” Kyari stated, confirming that the company now buys refined products solely from Nigerian refineries.
In August, President Bola Tinubu disclosed that the country spends over N2 trillion per month on the importation of PMS and AGO. This implies that Nigeria spends N24 trillion on importation of the refined products every year.
According to Kyari, sourcing from local refineries not only curtails the huge foreign exchange costs tied to fuel importation but also bolsters the domestic refining industry and strengthens national energy security.
Kyari further clarified NNPCL’s commitment to supporting all local refining efforts, including its partial ownership of the $20 billion Dangote refinery.
“We are very proud part-owners of the Dangote refinery, no doubt about it. We saw an opportunity… to log supply to domestic refineries, including Dangote and any other local refinery,” he explained. This strategy, Kyari noted, was a well-thought-out business decision to enhance self-reliance in fuel production, mitigate fuel shortages, and optimize Nigeria’s vast crude oil resources for national development.
He also addressed concerns and rumors suggesting that NNPCL might be impeding the operation of the Dangote refinery. He dismissed these allegations as unfounded, asserting, “There were several media stunts around saying NNPC was now a saboteur of domestic refining by not willing to support domestic refineries. The point is very far from it.”
He continued, “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.”
High Cost of Refining Nigeria’s Crude Locally
On November 1, some independent petroleum marketers claimed that they could import petroleum products and sell them at a lower price than the Dangote Refinery. The mega refinery, in its defense, claimed that any imported refined product sold below their price was substandard.
Speaking on the cost of refined petroleum products, where PMS prices have increased since the Dangote Refinery began selling to the Nigerian market, Kyari referred to Nigerian crude as “Lamborghini crude,” which is often priced higher than other crudes in the oil market.
“We should never forget that Nigerian crude is ‘Lamborghini crude.’ If we choose that every product 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.”
He continued, “So, no one takes Nigerian crude except one or two refineries that I know. Straight processing of Nigerian crude—nobody does this, because there’s a gap in value if you do this.”
However, Kyari affirmed that while the company currently sources all fuel domestically, it is working closely with the government to address potential pricing issues that may arise from relying entirely on local supply.
“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,” he assured. “I can confirm that substantial work has been done, and this will no longer be an issue.”
