US-Iran war: FG reopens fuel imports, Dangote reels from FX losses

The Federal Government has temporarily set aside its ban  on fuel imports, and has granted six new licences for the importation of Premium Motor Spirit (petrol), in the thick of concerns over supply amid geopolitical tensions in the Middle East. The move signposts  a dramatic reversal of Nigeria’s recent policy ges geared towards  reducing dependence on imported fuel.

This comes as the Dangote Petroleum Refinery reels from mounting foreign exchange losses, underscoring the challenges of the naira-for-crude arrangement. A senior management official of the $20bn Lekki-based firm informed GreenPlinth that  the deal’s inefficiency has eroded potential earnings, even as regulators seek to stabilise domestic fuel supply.

In view of this development, oil marketers and domestic crude refiners have called on the Federal Government to boost crude supply to Dangote and other local refineries to shield the country from fuel scarcity, as is being reported in other countries due to the Middle East crisis.

A new report by S&P Global obtained on Thursday showed that the Nigerian Midstream and Downstream Petroleum Regulatory Authority granted licences for the importation of about 180,000 metric tonnes of petrol. This comes barely weeks after the regulator insisted that domestic refining capacity was sufficient to meet Nigeria’s fuel demand.

A senior official at the regulator confirmed that the decision was taken to address a sudden supply gap triggered by geopolitical tensions in the Middle East.

The report read, “Nigeria has relaxed its gasoline import restrictions for the first time since October by issuing a round of new licenses to local marketers, according to an official at its downstream regulator.

“The NMDPRA did not issue import licenses for gasoline in February on the strength of the improved domestic supply then. But the Middle East crisis came, and we have had a shortfall. So to bridge the gap, import licenses were issued.”

GreenPlinth's investigations  revealed that the importing marketers include Bono Energy, Pinnacle, AYM Shafa, Matrix, A.A. Rano, and Nipco, each expected to import about 30,000 metric tonnes of Premium Motor Spirit, equivalent to approximately 40.5 million litres and a total of 243 million litres.

The development signals a shift in the government’s downstream strategy, which had recently leaned towards reducing dependence on imported fuel following increased output from local refineries.