Dangote Refinery Falls Short Of Daily Petrol Supply Commitment

In September, the federal government said the Dangote Refinery would supply Nigeria’s domestic market with 25 million litres of petrol daily and 35 million litres daily from October.

by Mary Izuaka

Dangote Refinery has failed to meet its daily petrol supply commitment to the Nigerian market, official data from a regulator shows.

According to the Dangote Evacuation Report, sourced from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), between 15 September and 5 October, the refinery delivered only 148 million litres of petrol, instead of 575 million litres.

Earlier in September, the federal government said the Dangote Refinery would supply Nigeria’s domestic market with 25 million litres of petrol daily and 35 million litres daily from October.

However, the data seen by PREMIUM TIMES shows that the refinery’s actual supply fell short of expectations.

Performance below expectations

The refinery’s performance between September 15 and 30 was 26 per cent of its target, with 2,207 trucks loaded out of 3,621 trucks sent to it within the period under review.

The trucks carried just 102,973,025 litres of the planned 400,000,000 litres of petrol earmarked to be lifted from the refinery at 25 million litres per day. With that figure, the refinery demonstrated a total supply shortfall of 297, 026,975 litres in 16 days. So the average supply shortfall is approximately 18.6 million litres per day or 74.3 per cent of the target.

Between 1 and 5 October, the refinery loaded 991 trucks out of 3,112 planned truck-outs. The trucks loaded just 45,114,534 litres of the planned 140,000,000 litres of petrol earmarked to be lifted from the refinery at 35 million litres per day, achieving only 32 per cent of its target, records seen by this newspaper show.

Although the total volume expected for five days should be 175 million (35 million per day), the total 140 million litres planned suggests that it was only for four of the five days between 1 and 5 October.

Based on the actual 45,114,534 litres loaded, the refinery demonstrated a total supply shortfall of 94,885,466 litres.

This newspaper has not been able to obtain the loading data from 6 October till date.

Supply breakdown

Loading data obtained by this newspaper showed that on 15 September, the first day of loading, the Dangote Refinery supplied the Nigerian National Petroleum Company Retail Limited (NNPC Retail Ltd) with a total of 2,486,842 (2.48 million) litres of petrol in 56 trucks.

On 16 September, NNPC Retail loaded 50 trucks containing 2,221,773 (2.2 million) litres of petrol. Another marketer, AYM Shafa, loaded 24 trucks with 1,120,465 (1.1 million) litres of the product. The total number of trucks loaded for the day was 74, while the product received aggregated to 3,342,238 (3.3 million) litres.

However, product supply improved marginally on 17 September but was still far below expectations. On the day, NNPC Retail Ltd received 4,063,526 (4 million) litres in 89 trucks, while AYM Shafa could only load one truck, which carried 44,999 litres of the product. NIPCO trucked out 360,161 litres of petrol in eight trucks. The total number of trucks loaded for the day was 98, conveying 4,468,686 (about 4.5 million) litres of the product.

On 18 September, the supply from the refinery also improved significantly but was still far below expectations. The refinery loaded 182 trucks with 8.39 million litres of petrol. On 19 September, the refinery loaded 246 trucks with 11.69 million litres of petrol while the supply dropped to 7.15 million litres on 20 September with 152 trucks loaded on that day.

On 21 September, the petrol loaded at the refinery improved to 9.40 million litres with 204 trucks loaded. The refinery loaded 127 trucks with 5.93 million litres of petrol on 22 September. On 23 September, the refinery loaded 106 trucks with 4.77 million litres of petrol.

On 24 September the refinery loaded 143 trucks with 6.67 million litres. Supply was reduced to 3.74 million litres on 25 September with 81 trucks loaded. The petrol loaded at the refinery on 26 September improved to 7.89 million litres with 156 trucks loaded.

On 27 September, the refinery loaded 138 trucks with 6.72 million litres. And 90 trucks were loaded with 4.28 million litres of petrol on 28 September.

On 29 September, the supply from the refinery improved significantly but was still far below expectations. The refinery loaded 245 trucks with 11.36 million litres of petrol and on 30 September, the supply from the refinery declined drastically to 4.64 million litres and 99 trucks were loaded.

On 1 October, the refinery loaded 248 trucks with 11.37 million litres of petrol. On 2 October, the refinery loaded 224 trucks with 10.04 million litres of the product. On 3 and 4 October, the refinery loaded 210 and 154 trucks with 9.48 and 9.48 million litres, respectively. On 5 October, the refinery loaded 155 trucks with 7.10 million litres of the product.

When PREMIUM TIMES confronted the Dangote Group with these data and sought clarification on why the refinery has not been able to meet its target, the firm’s Chief Branding and Communications Officer, Anthony Chiejina, declined comment on Tuesday afternoon.

Challenges ahead

To meet its daily supply target for October, the refinery needs to load at least 500 trucks daily, assuming each vehicle carries 70,000 litres of petrol to supply 35 million litres of petrol to the nation daily.

In September, the refinery needed to load 500 trucks daily, with each carrying 50,000 litres of the product to supply 25 million litres of petrol. However, the data shows that the refinery did not meet this target.

Implications

The Nigerian government and the state-owned NNPC Ltd announced the full deregulation of petrol earlier this month. The NNPC Ltd said it would no longer be the sole off-taker of petrol from the Dangote refinery. Thus, any marketer in need of the product could approach the refinery, by far the largest in the country, to buy petrol. Marketers are also free to import petrol and sell it at a non-regulated price.

However, the removal of petrol subsidies has led to an over 100 per cent increase in the price of the product in the past year. This has also led to many consumers abandoning their cars and not turning on petrol-running generators, which has led to a significant drop in Nigeria’s daily petrol consumption.

The reduced demand for petrol by citizens, many of whom can no longer afford the volume they used to, means that the immediate impact of Dangote not meeting its production target is not being felt by many. Things may, however, change if the situation persists.

Background

On 15 September, NNPC Ltd began loading petrol from the Dangote Refinery as the sole off-taker of the product from the facility.

PREMIUM TIMES also exclusively reported that NNPC Ltd has ended its exclusive purchase agreement with Dangote Refinery, opening up the market for other marketers to buy petrol directly from the refinery.

This means the NNPC will no longer be the sole off-taker, and marketers can now negotiate prices directly with Dangote Refinery.

On 11 October, the Nigerian government confirmed NNPC’s stance.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said this marks a departure from the previous arrangement, in which NNPC Ltd served as the sole purchaser and distributor of petrol from the refineries.