Lawmakers Drive Towards Agreement on Nigeria's Fuel Imports, Local Refining

The House of Representatives Committee on Petroleum Resources (Downstream) has initiated a fresh move to bridge the gap between petroleum product importers and local refiners. This development, which unfolded on Tuesday, saw lawmakers engage in crucial consultations with key industry players. The objective is to implement reforms aimed at bolstering Nigeria's energy security, ensuring a consistent fuel supply, and fostering a more competitive downstream petroleum sector.

During an interactive session held at the National Assembly, the committee convened with representatives from the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), the Independent Petroleum Marketers Association of Nigeria (IPMAN), and the Major Energies Marketers Association of Nigeria (MEMAN). This meeting comes amidst increasing discussions regarding the future of fuel imports as Nigeria's domestic refining capabilities continue to expand.

These engagements are timely, given the significant transformations occurring within the downstream petroleum industry. These changes include the implementation of the Petroleum Industry Act (PIA), the deregulation of the petrol market, ongoing rehabilitation efforts at state-owned refineries, and the commencement of large-scale refining operations by private entities. Such advancements have intensified the debate over the optimal pace for Nigeria to reduce its reliance on imported petroleum products while simultaneously maintaining supply and price stability.

Ikenga Ugochinyere, who chairs the committee, affirmed the House's dedication to forging consensus among operators, rather than imposing policies without prior consultation. The Imo lawmaker emphasized that any reforms impacting the downstream sector must acknowledge the operational realities of those whose investments underpin the nation's fuel distribution network. “We are here not to interrogate, not to accuse and not to put anyone on trial. We are here to listen. We are here to talk to one another as partners who share one common destiny—a Nigeria where energy is affordable, supply is stable, and no citizen suffers because petroleum products are out of reach,” he stated.

Ugochinyere further assured stakeholders that the committee would adopt an inclusive approach to lawmaking and oversight, stressing that no significant policy would be formulated without extensive industry consultations. He described marketers, depot owners, and other downstream operators as the crucial connection between government policy and consumers. “The marketers, depot owners, independent operators and major marketers remain the bridge between government policy and the pump. When that bridge is strong, Nigerians enjoy stable prices and reliable supply. When it is weak, the entire nation feels the consequences,” he added.

The committee chairman noted that Nigeria stands at a pivotal juncture in its energy sector's evolution. He highlighted increasing domestic refining capacity, shifting import dynamics, and ongoing efforts to enhance pipeline security and improve product distribution nationwide. He also confirmed that submissions from stakeholders would inform future legislative interventions designed to stimulate investment, deepen competition, strengthen local refining, and guarantee affordable, uninterrupted fuel supply. Ugochinyere concluded by assuring operators of the committee's commitment to continuous constructive engagement in fulfilling its constitutional oversight responsibilities.

Presenting DAPPMAN’s perspective, Executive Secretary Olufemi Adewole called upon the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to establish practical operating-stock guidelines, in line with Section 182 of the Petroleum Industry Act. He argued that these guidelines should clearly define standards for stock measurement, reporting, quality assurance, and accessibility. Adewole further contended that strategic petroleum reserves should not be judged solely by stored volumes, but also by the industry's capacity to finance, transport, and rapidly deploy these products during emergencies or supply disruptions. DAPPMAN also advocated for a joint market-monitoring framework, involving the NMDPRA and the Federal Competition and Consumer Protection Commission (FCCPC), to oversee supply concentration, product availability, allocation transparency, fair competition, and early indicators of market stress.

The association also urged the Federal Government to accelerate investments in vital logistics infrastructure, including roads, railways, inland waterways, pipelines, and petroleum depots. This, they argued, would reduce the industry’s heavy reliance on long-distance trucking from a limited number of coastal supply points. Additionally, DAPPMAN proposed the creation of a permanent government-industry consultative platform, comprising regulators, marketers, refiners, NNPC Limited, transport agencies, and security institutions, to regularly assess supply conditions, infrastructure deficiencies, and emerging operational risks.

Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN) underscored the downstream petroleum industry's strategic importance as one of the nation’s most critical economic sectors, essential for transportation, manufacturing, agriculture, healthcare, power generation, and national security. IPMAN National Chairman, Abubakar Shettima, observed that recent reforms, such as the PIA's implementation, fuel price deregulation, refinery rehabilitation, and increased private-sector refining capacity, have positioned Nigeria to transition from a major importer of refined products to a leading refining and distribution hub across Africa. However, the association highlighted persistent structural challenges, including “high financing costs, multiple taxation, foreign exchange volatility, inadequate storage, transportation infrastructure, pipeline vandalism and limited access by independent marketers to refinery products.” IPMAN urged the House committee to back reforms that would “strengthen logistics, improve market competition, lower distribution costs, attract investment and ensure the sustainable availability and affordability of petroleum products across the country.”

Speaking on behalf of MEMAN, Executive Secretary Clement Isong acknowledged Nigeria’s current capacity to meet domestic demand and compete in export markets. However, he cautioned against implementing blanket restrictions on petroleum product imports, asserting that strategic imports remain crucial for ensuring national energy security during periods of supply disruption. Isong suggested that the Federal Government should retain the flexibility to authorize imports whenever domestic supply cannot meet demand. He believes such flexibility would protect consumers from shortages and sudden price hikes. Isong recommended establishing a national strategic petroleum reserve capable of sustaining at least 60 days of domestic consumption to insulate the country from global supply shocks and price volatility. He cited the Liquefied Petroleum Gas (LPG) market, where increased imports helped bridge supply gaps and moderate prices, as proof that carefully managed imports can complement domestic production without undermining local investment. While reaffirming MEMAN’s support for the government’s policy of expanding domestic refining capacity, Isong maintained that “decisions on petroleum product imports should remain the responsibility of the Federal Government and the NMDPRA.” He argued that preserving regulatory flexibility would ensure adequate supply, sustain healthy market competition, and ultimately safeguard Nigerian consumers.

Despite varying opinions among stakeholders regarding the extent to which petroleum imports should continue as local refining capacity grows, there was broad agreement on the necessity for policy consistency, infrastructure investment, regulatory coordination, and sustained engagement between government and industry. The House committee indicated it would consider the recommendations presented during the session.