Oil marketers under the aegis of the Petroleum Products Retail Outlets Owners Association of Nigeria have rejected the decision by the Dangote Petroleum Refinery to sell refined petroleum products in dollars.
PETROAN urged the Federal Government not to allow the Lagos-based plant to sell in dollars to Nigerian marketers. The association’s President, Billy Gillis-Harry, disclosed this on Tuesday in a chat with newsmen.
This came as the refinery intensified the export of fuel to foreign nations, exporting about two million barrels of aviation fuel to the United States.
Also, the Manufacturers Association of Nigeria declared that the production of polypropylene by the Dangote refinery would revive Nigeria’s struggling textile industry and save the country $267m in import costs.
Last week, the Dangote refinery announced that it would no longer sell fuel to customers in naira as the Federal Government had suspended the sale of crude to the facility in naira.
Reacting to this on Tuesday, the PETROAN leader said the announcement by Dangote created tension among marketers who now panic-buy petrol over fear of possible scarcity or price surge.
According to him, allowing the sale of fuel in dollars will hurt the economy, bring undue pressure, and worsen inflation.
“PETROAN opposes the sale of petroleum products or any other products within Nigeria in dollars. We believe that such a practice would have an adverse impact on the economy, bringing undue pressure on foreign currency and exacerbating Nigeria’s already challenging inflationary situation.
“We urge the government to ensure that all transactions within the country are conducted in the local currency, the naira, to protect the economy and the welfare of Nigerians,” he stated.
PETROAN also raised concerns over the country’s inability to meet the growing demand for petroleum products despite the operationalisation of three local refineries in Nigeria.
It noted that though efforts were being made to boost local production, the supply from these refineries was still insufficient to meet the country’s needs.
In a statement signed by the association’s National Public Relations Officer, Dr Joseph Obele, PETROAN highlighted that the Nigerian National Petroleum Company Limited has two functional refineries, while the 650,000 barrels per day capacity Dangote refinery is also in operation.
Also, several modular refineries and importers are contributing to the petroleum supply chain.
But the association noted that the local production of a combined capacity of about 835,000 barrels per day cannot adequately cater to the country’s daily petroleum demand.
The marketers mentioned that with the current shortfall of local production capacity, the window for importing petroleum products must remain open.
PETROAN argued that allowing the importation of petroleum products would help maintain a stable and sustainable supply in the country, while also fostering healthy competition and keeping prices under control.
“PETROAN remains a strong advocate for the local production of petroleum products. We believe that promoting local production will not only guarantee energy security but also create jobs and stimulate economic growth.
“We also recognize that local production alone may not be sufficient to meet the country’s demand for petroleum products. Therefore, PETROAN supports the position that the window for importation of petroleum products should remain open. This will ensure that the country has a stable and sustainable supply of petroleum products, while also promoting competition and keeping prices in check.
“We are optimistic that the Ministry of Petroleum Resources will continue to work in the best interest of Nigeria and come up with policies and solutions that will ensure the sustainable supply of petroleum products,” the statement added.
The association also expressed concern over the recent panic buying of petroleum products that has been observed nationwide following the temporary suspension of sales in naira by the Dangote refinery.
According to the group, this situation should not serve as a justification for panic buying.
“We wish to reassure the public that this is not a reason for panic. There is no shortage of petroleum products,” PETROAN stated, urging Nigerians to remain calm and continue their daily activities without fear of scarcity.
The association further emphasized that the Federal Government, the Ministry of Petroleum, and relevant regulatory agencies are committed to ensuring a seamless supply of petroleum products.
Dangote exports JetA1
The Dangote Petroleum Refinery’s export of aviation fuel (JetA1) to the United States is set to challenge domestic producers’ economics in the largest fuel-consuming nation.
Six vessels carrying about 1.7 million barrels of jet fuel from the Dangote refinery arrived at US ports this month, according to data from ship-tracking service Kpler.
Another vessel, Hafnia Andromeda, is set to arrive at the Everglades terminal on March 29. 2025, with a load of about 348,000 barrels of jet fuel.
A report by Reuters stated that US jet fuel imports are set to hit a two-year high in March after Nigeria’s Dangote refinery pushed barrels of Jet-A1 to North America. This should lower the prices of the fuel in the peak summer travel season, according to trade analysts and storage brokers.
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“The shipments by the 650,000 barrels-per-day Dangote refinery, Africa’s largest, highlight its potential to reshape global fuel trading dynamics by creating a new swing supplier in the Atlantic Basin,” Reuters stated.
The report added that the refinery had already shown signs of success in competing with European refiners on gasoline exports, saying the jet fuel shipments to the United States could challenge domestic producers’ economics.
The total US jet fuel imports in March stood at around 226,000 bpd, the most since February 2023, the data showed.
The Dangote refinery started production in January 2024 after years of construction delays. It ramped up production to about 85 per cent of its 650,000 capacity in February, allowing it to sell more fuel to international markets.
The refinery is planning to hit full capacity this month, but it may be constrained by crude challenges, especially as the Federal Government has reportedly suspended the naira-for-crude deal.
Meanwhile, the Dangote refinery is unlikely to be a regular jet fuel supplier to the US, as a maintenance-related shutdown of the Phillips 66 Bayway refinery in New Jersey helped open a rare arbitrage opportunity for flows from Nigeria to the US, Sparta Commodities analyst James Noel-Beswick told Reuters.
“The window is likely to close soon or shrink significantly due to elevated US inventories of the aviation fuel,” Noel-Beswick was quoted.
It was learnt that the demand to lease storage tanks for jet fuel in Houston and New York Harbor in April is averaging around 700,000 barrels on storage broker TankTiger’s platform, five to six times the average monthly demand, according to TankTiger’s Chief Operating Officer, Steven Barsamian.
The surge in demand, partly due to the influx of supply from Nigeria, is likely to lower jet fuel prices in the US ahead of peak summer travel season, Barsamian said.
Polypropylene production
The Manufacturers Association of Nigeria said on Tuesday that the production of polypropylene by Dangote will revive Nigeria’s struggling textile industry and save the country $267m in import costs.
The Director-General of MAN, Segun Ajayi-Kadir, stated this in an interview on Channels Television’s Business Incorporated. Ajayi-Kadiri highlighted the struggles of the textile industry, which he said was once thriving and employed over 25,000 workers in the northern region alone.
He explained that many companies have been forced to shut down due to the absence of local polypropylene production and the scarcity of foreign exchange required for imports.
He further stated that the production of polypropylene by the Dangote Refinery and Petrochemicals will ensure that Nigeria, which currently imports 90 per cent of its annual polypropylene requirements of about 250,000 metric tonnes will now become a net exporter, generating foreign exchange to strengthen the economy.
“For us in the manufacturing sector, this is a welcome development. It more than covers the 250,000 metric tonnes that constitute our national demand, which has been severely lacking. You can imagine the sectors it will impact—the textile industry, the plastic industry, the furniture industry.
“We are looking at an amount in the region of $267m being saved. This is the amount spent every year in scarce dollars to import these materials. It is a welcome development for manufacturers, as it will incentivise investment in the sector,” he said.
Ajayi-Kadir, who lamented how the collapse of the textile industry led to widespread unemployment, stated that with the local production of polypropylene, manufacturers will no longer need to rely on imported polypropylene.
This, he added, will help reduce their costs and improve efficiency.
“We have seen the global trend of the textile industry relying on the petrochemical industry. So, you can imagine what a boost this is going to bring to the sector.
“And that it is now available locally and does not require that we continue to look for foreign exchange to be able to meet our demands. It is cheering news for manufacturers,” he added.
The manufacturer urged the Federal Government and other stakeholders to support the local production of polypropylene through incentives, stating that this would attract more investments into the sector and increase manufacturers’ contributions to GDP.
Ajayi-Kadir added that this would significantly aid the government’s goal of achieving a $1tn economy.
“If the economy is going to save $267m in imports at a time when the current government is striving to create a $1tn economy, this is a significant saving, especially considering the scarcity and inadequacy of foreign exchange supply. When we see champions like this blazing the trail, showing that we can even become a net exporter, it is certainly worthy of support.
“The NNPC has a capacity of 13,000 metric tonnes. When you add this to what Indorama has, along with the massive supply we will have from Dangote, we will become a net exporter. This means all our imports from Saudi Arabia, South Africa, South Korea, China, and India will be eliminated. We can now aim for self-sufficiency and even export for foreign exchange,” he added.
Dangote’s $2bn Petrochemical Plant in Ibeju-Lekki, Lagos, is designed to produce 77 grades of polypropylene. With a capacity of 900,000 metric tonnes per year and a turnover of $1.2bn, it aims to meet the growing demand in plastic processing industries globally.
The plant is expected to boost investment in downstream industries, create jobs, increase tax revenues, reduce foreign exchange outflow, and contribute to the country’s GDP growth.
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