Africa's richest man says fuel import licences are squeezing his Nigerian refinery

Aliko Dangote's refinery said imported petrol supplied about 43% of the Nigerian market last month and criticised regulators for continuing to license imports, arguing that surplus fuel it cannot sell at home is being forced offshore.

The complaint, issued Wednesday by the management of Dangote Petroleum Refinery and Petrochemicals, rests on a figure the company drew from its own market data. It comes weeks before an initial public offering the refinery has valued at roughly $40 billion.

Import volumes have made demand impossible to forecast, the company said, leaving it holding inventory against a market it cannot size. It has carried reserved volumes since commissioning to guarantee supply, at a cost in storage, logistics and working capital, and said that in a market absorbing large licensed imports with no visibility on what follows, "it becomes commercially unsustainable to continue holding excess inventory indefinitely."

Fuel the domestic market leaves unsold is being shipped out. Export volumes have risen in recent months to clear surplus and avoid storage and financing charges, the refinery said, describing the shipments as an operational response rather than any retreat from Nigeria.

The company also pre-empted blame for any shortage, saying disruptions caused by excessive importation and the resulting forecasting difficulties should not be laid at its door.

That account cuts against the reading given to export data the US Energy Information Administration published this week, which showed Nigerian seaborne petroleum product shipments averaging 561,000 barrels a day in the second quarter, against 79,000 a day in 2023. Exports accounted for 350,000 barrels a day of the total. Nigeria was importing close to 400,000 barrels a day of refined products before the plant opened. The EIA offered no explanation for the growth, and the refinery cited none of the figures, but its statement describes a producer evacuating stock rather than one advancing into Europe and Africa from strength.

Timing gives the argument commercial weight. Dangote Petroleum Refinery has applied to Nigeria's Securities and Exchange Commission for an offering of as much as $5 billion on the Nigerian Exchange in October, after a July private placement led by Africa Finance Corporation was oversubscribed 3.7 times. Investors weighing that offer are being told the domestic market is not fully available to the asset they are buying into.

The Lekki Free Zone plant, which began operating in 2024, lifted crude distillation capacity to 700,000 barrels a day from 650,000 after completing maintenance and expansion work in February.

Dangote asked regulators for transparency on import volumes, better market coordination and policies favouring local refining, foreign exchange conservation and greater domestic capture of the returns on Nigeria's refining investment.