The Centre for the Promotion of Private Enterprise (CPPE) has urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to tie petroleum-product import approvals to transparently verified domestic supply gaps.
The group said petroleum-product imports should serve as a contingency mechanism for genuine supply shortages rather than operate as a parallel market capable of displacing adequate domestic production.
|
|
The CPPE made the call in a policy brief released on Sunday by its Chief Executive Officer, Muda Yusuf, titled “Policy Brief on Rising Petroleum-Product Imports and the Future of Domestic Refining.”
The group said that where local refineries can supply products of acceptable quality and quantity at competitive market prices, indiscriminate import licensing could weaken investment, jobs, foreign-exchange conservation, industrialisation, and national energy security.
|
|
|
|---|
The position comes amid a recent increase in petrol imports despite the expansion of Nigeria’s domestic refining capacity.
According to figures contained in the CPPE brief and attributed to NMDPRA’s June and July 2026 monthly statistics, average daily Premium Motor Spirit (PMS) imports rose from 5.9 million litres in May to 18.1 million litres in June and 19.7 million litres in July.
Imported petrol consequently accounted for 12.4 per cent of total PMS receipts in May, 35.8 per cent in June and 43.3 per cent in July, according to the figures.
Stay Ahead with Premium Times
Follow us on Google News and never miss breaking stories, investigations, and in-depth reporting.
Add as a preferred source on Google
Domestic PMS supply, meanwhile, fell from 41.5 million litres per day in May to 32.5 million litres in June and 25.8 million litres in July, while total PMS receipts fell from 47.4 million litres in May to 45.5 million litres in July.
Mr Yusuf said the increase in imports should prompt a transparent assessment of the relationship between domestic production and market demand.
“The concern is not with imports required to close a genuine and independently verified shortfall,” the CPPE said.
The group said imports remained a legitimate contingency tool for refinery outages, seasonal demand spikes, quality gaps, and strategic stock replenishment.
It, however, argued that import permits should not be issued without a transparent demonstration that domestic refiners cannot meet relevant demand at acceptable standards and competitive market terms.
The development comes as Nigeria’s refining sector undergoes a major transition, particularly following the ramp-up of the Dangote Petroleum Refinery and the return of other domestic refineries to operation.
Dangote Refinery, which has a nameplate capacity of 650,000 barrels per day, surpassed that capacity in a performance test in June, reaching more than 700,000 barrels per day, according to the company.
The refinery has also become an increasingly important supplier of refined products to Nigeria and regional markets, although its operations have continued to face challenges, including securing sufficient domestic crude supply.
Against that background, Mr Yusuf said Nigeria needed a more predictable framework for deciding when imports were necessary.
He cited Sections 317(8) and (9) of the Petroleum Industry Act, stating that the provisions contemplate licensing of petroleum product imports in the context of a domestic supply shortfall.
The CPPE therefore called for regulatory discretion to be exercised transparently, predictably, and consistently with Nigeria’s domestic refining and industrialisation objectives.
Mr Yusuf said a 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,” he said.
The group noted that a deregulated market did not imply regulatory indifference to the structure of supply, adding that the regulator must balance consumer protection and supply security with the domestic-supply framework under the Petroleum Industry Act.
It added that where domestic supply was genuinely adequate, import permits could suppress refinery offtake, weaken utilisation rates, and shift demand, income, and employment abroad.
Mr Yusuf also urged NMDPRA to establish predictable rules to encourage investment in refining, storage, pipelines, marine logistics, and petroleum product distribution.
He warned that frequent or unexplained reversals in import policy could increase uncertainty and raise the risk premium on downstream investments.
According to the CPPE, the recent import figures also have implications for Nigeria’s foreign-exchange position.
The group said every avoidable litre of imported petroleum products creates demand for foreign exchange to cover product costs, freight, insurance and associated charges, adding that domestic refining, by contrast, could retain a larger share of the value generated from petroleum-product supply within Nigeria, even where some crude or specialised inputs are imported.
The CPPE also linked domestic refining to employment across engineering, maintenance, fabrication, laboratories, haulage, storage, retail, maritime services and professional services.
Mr Yusuf said refining was a strategic anchor industry because it provides fuels and feedstocks for petrochemicals, plastics, fertiliser, pharmaceuticals, paints, packaging and other manufacturing activities.
The group also argued that stronger domestic refining capacity would improve energy security by shortening supply chains and reducing Nigeria’s exposure to shipping disruptions, geopolitical conflicts, freight shocks, and international petroleum product shortages.
It said that having several reliable domestic refiners would provide greater security than dependence on either imports or a single refinery.
The CPPE further warned that uncertainty over import policy could affect investment decisions in the refining sector because refineries require large, patient and largely irreversible capital.
“If investors believe permits will admit imports irrespective of verified domestic availability, expected refinery utilisation and cash flow become less bankable,” the group said.
According to the CPPE, lower petroleum-product imports could also improve Nigeria’s trade balance, reduce pressure on foreign-exchange reserves and strengthen the transmission of exchange-rate stability.
The group added that domestic refiners would also contribute through taxable profits, payroll, and activity among local suppliers.
Mr Yusuf, however, cautioned that support for domestic refining should not become a cover for inefficiency, monopoly pricing, or poor service.
He proposed what the CPPE described as a “domestic supply first, competition always, imports only for verified gaps” framework.
Under the proposed approach, refiners would have to demonstrate deliverable volumes rather than merely point to nameplate capacity.
The group also said domestic and imported products should meet identical quality specifications, while domestic supply should be benchmarked transparently against import-parity fundamentals, adjusted for avoided freight and domestic logistics.
It urged the government to encourage several domestic refiners and prevent abuse of market dominance, while ensuring that emergency import windows could be activated when inventories or deliveries fall below published thresholds.
To achieve this, the CPPE asked NMDPRA to publish a monthly national supply-and-demand balance showing, by product, verified refinery output, domestic evacuation, inventories, consumption, exports, committed deliveries, landed imports and stock-sufficiency days.
The group also recommended that the regulator publish a formal supply-gap determination before granting material import volumes, including the size, product, geographical area, quality specification, duration and evidence supporting the shortfall.
It said qualified domestic refiners should then be given a short, time-bound opportunity to commit supply to the identified gap, after which any residual unmet demand could be allocated for importation.
The CPPE also called for import permits to correspond to verified residual gaps, to contain shipment windows, and to expire automatically.
Mr Yusuf said regulators should compare permitted, financed, shipped and landed volumes, cancel speculative permits, sanction misreporting and prevent the warehousing of import permits.
The group also called for equal quality, tax, levy and disclosure requirements for domestic and imported petroleum products and urged NMDPRA to publish permit beneficiaries, approved volumes and actual landings, subject only to legitimate commercial confidentiality.
It proposed an emergency-import trigger based on objective indicators such as minimum stock days, refinery outage duration or delivery failures, allowing imports to be accelerated when necessary without weakening normal domestic-supply rules.
The CPPE called for stronger coordination among NMDPRA, the Nigerian Upstream Petroleum Regulatory Commission, and oil producers to ensure a reliable domestic crude supply to refineries.
It said restricting product imports without securing adequate feedstock for domestic refineries would be internally inconsistent.
The group further urged the Federal Competition and Consumer Protection Commission to strengthen oversight of the market to curb monopolistic pricing tendencies and abuse of dominance.
It recommended that major petroleum-product import policy decisions be subjected to an industrialisation impact assessment, taking into account refinery utilisation, employment, foreign exchange, investment, supplier development, consumer prices and energy security.
READ ALSO: CPPE backs FG reforms, urges shift from economic stability to productivity
The call comes at a time when Nigeria’s downstream petroleum sector is shifting from decades of heavy dependence on imported refined products towards greater domestic production.
The Dangote refinery has increased its output and exports, while other refineries have also resumed or expanded operations. At the same time, crude supply remains an important constraint for domestic refiners, with Dangote saying in July that it was still importing a significant portion of its crude requirements due to insufficient domestic supplies.
The increase in petrol imports, therefore, does not by itself establish that all imports are unnecessary. A fall in domestic output, refinery maintenance, crude supply constraints, logistics problems, or other temporary disruptions could create genuine supply gaps that require imports.
The issue raised by the CPPE is how such gaps are determined and whether the volume of imports approved corresponds to the actual residual demand.
The group said Nigeria had reached a point where downstream policy should move 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,” Mr Yusuf said.
He said the appropriate policy should give efficient domestic producers a fair opportunity to serve the Nigerian market, while allowing imports to close only demonstrable gaps.
According to the CPPE, the credibility of Nigeria’s industrialisation agenda would depend in part on whether regulators align their day-to-day decisions with the country’s objectives of expanding domestic production, conserving foreign exchange, creating jobs, and strengthening energy security.
Discover more from Premium Times Nigeria
Subscribe to get the latest posts sent to your email.
More News
