CPPE Alerts: Soaring Fuel Imports Jeopardize Nigeria's Local Refining Sector

The Centre for the Promotion of Private Enterprise (CPPE) has voiced serious apprehension regarding a significant spike in petrol imports, which saw a 234 percent increase over a three-month period. Data from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) indicates that daily average petrol imports escalated from 5.9 million litres in May 2026 to 18.1 million litres in June, representing a 206.8 percent rise. This figure further climbed to 19.7 million litres per day by July of the same year.

Simultaneously, the CPPE highlighted a worrying trend where the market share of domestically refined petrol dwindled from 41.5 percent in May 2026 to 32.5 percent in June 2026, and then to a mere 25.8 percent in July 2026. In stark contrast, imported petrol's market share surged from 12.4 percent in May to 43.3 percent by July 2026.

The CPPE emphasized that while imports are crucial for bridging supply gaps, they should not displace domestic refining capabilities. The centre argues that a deregulated market does not imply a lack of regulatory oversight concerning supply structures. Refining, according to the CPPE, is a vital foundational industry that supplies fuels and essential raw materials for petrochemicals, plastics, fertilisers, pharmaceuticals, paints, packaging, and various manufacturing sectors. They warned that any policy undermining viable domestic refining output would contradict Nigeria's aspiration for deeper industrial capacity.

In a policy brief titled “Rising Petroleum-Product Imports and the Future of Domestic Refining,” Dr. Muda Yusuf, the Chief Executive of CPPE, clarified that the organisation's concern is not with legitimate imports required to address verified domestic shortfalls, such as those arising from refinery downtime, seasonal demand surges, quality issues, or strategic stock replenishment.

Yusuf stated that the CPPE’s policy concern emerges when import permits are granted without clear evidence that local refiners cannot adequately meet demand at competitive prices and acceptable standards. He asserted, “CPPE believes that petroleum-product imports should function as a transparent supply-gap instrument and not as a parallel market that displaces adequate domestic production.” He further elaborated that “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.”

Yusuf stressed that Nigeria must now transition its downstream policy from managing chronic import dependence to fostering a competitive domestic refining ecosystem. He warned that “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 CPPE advocates for a rules-based regime where efficient local production gets a fair chance to serve the Nigerian market, imports only fill verified gaps, consumers are protected, and competition is maintained. Yusuf added, “The credibility of Nigeria’s industrialisation agenda will be judged partly by whether regulators align their day-to-day decisions with these national objectives.”

The centre further pointed out that Sections 317(8) and (9) of the Petroleum Industry Act (PIA) envision petroleum product import licensing specifically within the context of a domestic supply shortfall. It cautioned that regulatory discretion must be exercised transparently, predictably, and in line with Nigeria's domestic refining and industrialisation goals.

To achieve this, the CPPE urged the NMDPRA to publicly determine product-by-product supply gaps before approving significant import volumes, ensure qualified domestic refiners have a fair opportunity to meet verified demand, restrict import permits to the quantified remaining gap for a defined period, and publish monthly data on permits, landing, and domestic evacuation.

This call, the CPPE clarified, is not for a monopoly or blanket protection, but for a systematic, rules-based regulation that ensures fair competition, consumer protection, and support for local productive capacity. “Without this information, the market cannot determine whether permits address a real shortfall or merely expand import competition against available domestic output,” the CPPE concluded.

Yusuf highlighted that the surge in imports coincided with evidence of substantial domestic refining capabilities. He mentioned that Dangote Refinery reported a test run exceeding 700,000 barrels per day in June, while the NMDPRA had indicated an average capacity utilisation of 99.12 percent for domestic refineries in April. Yusuf emphasized that regulators must balance consumer protection and supply security with the PIA’s framework for domestic supply. He argued that when domestic supply is genuinely sufficient, import permits can suppress refinery off-take, reduce utilisation rates, and shift demand, income, and employment opportunities abroad.