By Admin
A group, Center for the Promotion of Private Enterprise (CPPE), has said any consideration for petrol importation must be to close a genuine and independently verified shortfall.
Its Chief Executive Officer, Dr. Muda Yusuf, said while imports remains a legitimate contingency tool for refinery outages, seasonal demand spikes, quality gaps and strategic-stock replenishment, import permits must not be issued without a transparent demonstration that domestic refiners cannot meet the relevant demand at acceptable standards and competitive market terms.
This distinction, he noted, is central to the Petroleum Industry Act (PIA), in which Sections 317(8)–(9) contemplate petroleum-product import licensing in the context of a domestic supply shortfall.
Regulatory discretion, Yusuf insisted, should therefore be exercised transparently, predictably and consistently with the country’s domestic-refining and industrialisation objectives.
“Petroleum-product imports should function as a transparent supply-gap instrument—not as a parallel market that displaces adequate domestic production. Where local refiners can supply products of acceptable quality, quantity and competitive market price, indiscriminate import licensing weakens investment, jobs, foreign-exchange conservation, industrialisation and national energy security. Import approvals must be tied transparently to verified domestic supply gaps,” Yusuf said.
He noted that the continued importation of petrol takes a toll on the country’s foreign-exchange conservation drive because every avoidable litre imported creates demand for foreign exchange for product cost, freight, insurance and associated charges. Conversely, he argued, domestic refining retains a larger share of value within Nigeria, even where some crude or specialised inputs are imported.
Further espousing the inherent benefit of encouraging domestic refining to thrive, he said it also supports direct technical employment and wider jobs in engineering, maintenance, fabrication, laboratories, haulage, storage, retail, maritime services and professional services , while importing petrol transfer much of this multiplier abroad.
“Refining is a strategic anchor industry. It provides fuels and feedstocks for petrochemicals, plastics, fertiliser, pharmaceuticals, paints, packaging and other manufacturing chains. Policy that displaces viable domestic output contradicts Nigeria’s ambition to deepen industrial capacity.
“Domestic refining shortens supply chains and reduces exposure to shipping disruptions, geopolitical conflict, freight shocks and international product shortages. Diversification among several reliable domestic refiners would be more secure than either import dependence or single-refinery dependence.
“Refineries require large, patient and irreversible capital. If investors believe permits will admit imports irrespective of verified domestic availability, expected refinery utilisation and cash flow become less bankable. This could delay expansions and discourage new modular and conventional refinery projects.
“Lower product imports can improve the trade balance, reduce pressure on reserves and strengthen the transmission of exchange-rate stability. Domestic firms also create taxable profits, payrolls and supplier activity,” Yusuf said.
He charged the NMDPRA to publish a product-by-product supply-gap determination before approving material import volumes; give qualified domestic refiners a fair opportunity to meet verified demand; restrict import permits to the quantified residual gap and a defined validity period; and publish monthly permit, landing and domestic-evacuation data.
He argued that a deregulated market does not imply regulatory indifference to the structure of supply. Therefore, he continued, the regulator must reconcile consumer protection and supply security with the PIA’s domestic-supply framework.
“Where domestic supply is genuinely adequate, import permits can suppress refinery offtake, weaken utilisation rates and transfer demand, income and employment abroad,” he said.
For him, the burden of proof should be transparent, providing credible supply-gap assessment should disclose projected demand, verified domestic production and inventory, committed refinery deliveries, product specifications, logistics constraints and the precise residual volume requiring imports.
“Without this information, the market cannot determine whether permits address a real shortfall or merely expand import competition against available domestic output. NMDPRA’s mandate requires more than licensing and supply monitoring. It should create predictable rules that encourage investment across refining, storage, pipelines, marine logistics and distribution. Frequent or unexplained reversals in import policy increase uncertainty and raise the risk premium on downstream investment,” Dr. Yusuf explained.
He also warned that there is a need for a balanced policy framework because support for domestic refining should not become protection for inefficiency, monopoly pricing or poor service.
He propagated a framework based on “domestic supply first, competition always, imports only for verified gaps.” This, he added, should rest on five safeguards: adequacy, where refiners must demonstrate deliverable volumes—not merely nameplate capacity; quality, by ensuring all domestic and imported products must meet identical specifications; competitive pricing- domestic supply should be benchmarked transparently to import-parity fundamentals, adjusted for avoided freight and domestic logistics; plurality, that is policy should encourage several domestic refiners and prevent abuse of dominance, and consumer protection emergency import windows should activate promptly when inventories or deliveries fall below published thresholds.
He recommended that the regulator should publish a monthly national supply-and-demand balance, including by product, verified refinery output, domestic evacuation, inventories, consumption, exports, committed deliveries, imports landed and stock-sufficiency days. It also recommended that before granting material import volumes, the Authority should publish the size, product, geography, quality specification, duration and evidence supporting the shortfall, and offer domestic refiners a transparent right to respond by granting them a short, time-bound opportunity to commit supply against the identified gap. Unmet residual demand can then be allocated for importation.
Others include: permits should correspond to the verified residual gap, contain shipment windows and expire automatically. Open-ended or excessive approvals should be avoided; audit performance and enforce use-it-or-lose-it rules that is comparing permitted, financed, shipped and landed volumes; cancel speculative permits; sanction misreporting; and prevent permit warehousing; apply equal standards and full transparency by subjecting domestic and imported products to face equivalent quality, tax, levy and disclosure requirements. Publish permit beneficiaries, approved volumes and actual landings, subject only to legitimate commercial confidentiality; establish an emergency-import trigger which will define objective thresholds—such as minimum stock days, refinery outage duration or delivery failure—that permit accelerated imports without compromising normal domestic-supply discipline; secure crude supply for domestic refineries by coordinating with NUPRC and producers to ensure credible domestic crude-supply obligations, commercially workable pricing and reliable delivery.
Product-import restraint without feedstock security would be internally inconsistent; strengthen competition oversight, the Federal Consumer Protection and Competition Commission must be diligent in its regulatory oversight to curb monopolistic pricing tendencies and abuse of dominance power and adopt an industrialisation impact test for major import-policy decisions should assess effects on refinery utilisation, employment, foreign exchange, investment pipelines, supplier development, consumer prices and energy security.
“Nigeria has reached a point where downstream policy must shift decisively from managing chronic import dependence to building a competitive domestic refining ecosystem. Allowing imports without a transparent, verified shortfall would squander an historic opportunity to conserve foreign exchange, create jobs, deepen industrial linkages and strengthen energy security.
“The required policy is a rules-based regime in which efficient domestic production receives a fair opportunity to serve the Nigerian market, imports close only demonstrable gaps, consumers remain protected and competition is preserved. The credibility of Nigeria’s industrialisation agenda will be judged partly by whether regulators align their day-to-day decisions with these national objectives,” Yusuf said.
Between May and July, Dangote Refinery reported a test run above 700,000 barrels per day in June, while Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) reported domestic refineries operating at 99.12 per cent average capacity utilisation in April. Nigeria’s seaborne petroleum-product exports have also risen strongly in the period, indicating that aggregate refining capability is no longer the binding constraint it once was.
Data from the NMDPRA also showed that average PMS imports increased from 5.9 million litres per day in May 2026 to 18.1 million litres per day in June, representing a 206.8 per cent increase; it rose further to 19.7 million litres per day in July. Imports consequently supplied 43.3 per cent of July petrol receipts, compared with 12.4 per cent in May.
