Nigeria is currently importing a staggering amount of fuel, a move that could seriously hurt local refineries. The Centre for the Promotion of Private Enterprise (CPPE) is sounding the alarm, saying that if import permits keep getting handed out without proof of a real shortage, we might undo all the progress made in boosting our own refining power.
Dr. Muda Yusuf, the CEO of CPPE, laid it out in a report on Sunday. He argued that when we import fuel even when our own refineries can supply it, it means less work for our refiners, lower operating capacity, and money and jobs that should stay in Nigeria going overseas. Nigeria's downstream petroleum market, he says, is at a critical turning point. With big private refineries now running, the need to depend on imports is way less than it used to be.
The numbers don't lie, and they're a bit scary. According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the average daily import of petrol, what we call PMS, jumped from 5.9 million litres in May to a whopping 18.1 million litres in June. That’s a 206.8 per cent increase, folks! And it didn't stop there; it crept up further to 19.7 million litres in July. Back in May, imports made up only 12.4 per cent of all the petrol we received, but by July, that figure had shot up to 43.3 per cent.
What makes this surge even more puzzling is that it’s happening at a time when our own refineries are clearly capable of producing more. The Dangote Refinery, a major player, was reportedly running tests at over 700,000 barrels per day in June. And the NMDPRA itself recorded that our domestic refineries were operating at an impressive average utilisation rate of 99.12 per cent back in April. Nigeria is even exporting refined petroleum products, which shows our refining capacity is no longer the bottleneck it once was.
Now, CPPE isn't saying we should never import fuel. They understand that imports are sometimes necessary to cover genuine shortfalls caused by refinery breakdowns, sudden spikes in demand, quality issues, or to refill strategic reserves. But the problem, according to Dr. Yusuf, is when import permits are granted without a clear, transparent showing that local refiners genuinely can't meet the demand at fair prices and good quality.
This whole issue ties back to the Petroleum Industry Act (PIA). Sections 317(8) to (9) of the Act clearly state that import licenses should only be given when there's a shortfall in domestic supply. "Regulatory discretion should therefore be exercised transparently, predictably and consistently with the country’s domestic-refining and industrialisation objectives," Dr. Yusuf stated. Allowing imports when we don't truly need them puts critical national interests at risk, including saving foreign exchange, creating jobs, fostering industrial growth, ensuring energy security, building investor confidence, and maintaining fiscal stability. When we import, much of this economic benefit is lost to other countries.
CPPE has offered some practical solutions to the NMDPRA. They suggest publishing a detailed breakdown of supply gaps for each product before approving large import volumes. This way, domestic refiners get a fair shot at meeting the verified demand. Import permits should then be limited to only cover the confirmed, remaining gap and have a strict expiry date. They also want to see monthly reports on permits, import costs, and how much product is moved inland.
A "use-it-or-lose-it" policy for import permits is also recommended to stop people from just hoarding them speculatively.
This isn't about demanding a monopoly for local refiners or shutting out all competition. It's about making sure the competition is fair, consumers are protected, and our domestic production capacity is supported. CPPE is also calling on the Federal Consumer Protection and Competition Commission to step up its oversight to prevent price manipulation and unfair market dominance. A joint effort with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is also needed to guarantee a steady supply of crude oil for our refineries.
Ultimately, Nigeria's downstream petroleum policy needs a serious shift. We must move from constantly managing import dependence to actively building a strong and competitive domestic refining industry. Letting imports flow in without clear proof of a shortfall would mean squandering a golden chance to save foreign currency, create employment, deepen our industrial networks, and bolster our energy security. It’s a wake-up call for a more strategic approach to our oil and gas sector.