- Says Nigeria Risks Squandering Refining Gains With Unchecked Imports
- Demands Transparency In NMDPRA Approvals
The Centre for the Promotion of Private Enterprise (CPPE) has raised the alarm over the sharp resurgence in petroleum-product imports, warning that indiscriminate import approvals could undermine Nigeria’s rapidly expanding domestic refining industry.
The private-sector advocacy group, in a policy brief issued on Sunday by its Chief Executive Officer, Dr Muda Yusuf, called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to tie import approvals strictly to transparently verified domestic supply gaps.
CPPE said petroleum-product imports should serve as a contingency mechanism for genuine shortages rather than become a parallel supply channel capable of displacing locally refined products.
According to the group, average Premium Motor Spirit (PMS) imports jumped from 5.9 million litres per day in May 2026 to 18.1 million litres per day in June, representing a staggering 206.8 per cent increase.
Imports rose further to 19.7 million litres per day in July, accounting for 43.3 per cent of total PMS receipts, compared with just 12.4 per cent in May.
CPPE described the development as a “sharp reversal” in the downstream petroleum market, particularly against the backdrop of growing domestic refining capacity.
“The concern is not with imports required to close a genuine and independently verified shortfall,” the organisation said.
It stressed that imports remained legitimate where there were refinery outages, seasonal demand spikes, quality gaps or the need to replenish strategic stocks.
“But the policy concern arises where import permits are issued without a transparent demonstration that domestic refiners cannot meet the relevant demand at acceptable standards and competitive market terms,” CPPE warned.
The group said the development was particularly troubling because of evidence of substantial domestic refining capacity.
It cited Dangote Refinery’s reported test run above 700,000 barrels per day in June and NMDPRA’s earlier report that domestic refineries achieved an average capacity utilisation of 99.12 per cent in April.
CPPE also pointed to rising seaborne petroleum-product exports as evidence that Nigeria’s aggregate refining capacity may no longer be the major constraint it once was.
‘Imports Should Close Gaps, Not Create Displacement’
The organisation argued that deregulation of the downstream sector should not translate into regulatory indifference to the structure of petroleum supply.
“A deregulated market does not imply regulatory indifference to the structure of supply,” CPPE said, insisting that the regulator must balance consumer protection and supply security with the domestic-supply framework established under the Petroleum Industry Act.
It warned that where domestic supply is adequate, unrestricted import approvals could suppress refinery offtake, weaken capacity utilisation and shift demand, income and employment outside Nigeria.
CPPE therefore demanded that NMDPRA publish a product-by-product supply-gap determination before approving significant import volumes.
Such assessments, it said, should disclose projected demand, verified domestic production and inventory levels, 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,” it said.
FX, Jobs, Industrialisation At Risk
CPPE warned that every avoidable litre of imported petroleum product places additional pressure on Nigeria’s foreign exchange through product costs, freight, insurance and related charges.
It argued that domestic refining would retain a greater share of the value generated from petroleum processing within the Nigerian economy while creating jobs across engineering, maintenance, fabrication, laboratories, haulage, storage, retail, maritime and professional services.
The group also described refining as a strategic anchor for industrialisation, noting that petroleum products and feedstocks support industries including petrochemicals, plastics, fertiliser, pharmaceuticals, paints and packaging.
“Policy that displaces viable domestic output contradicts Nigeria’s ambition to deepen industrial capacity,” CPPE said.
It further warned that excessive dependence on imports could expose Nigeria to shipping disruptions, geopolitical conflicts, freight shocks and international product shortages.
CPPE Proposes ‘Domestic Supply First’ Framework
CPPE rejected the idea that protecting domestic refining should amount to shielding inefficient operators from competition.
Instead, it proposed what it described as a balanced framework: “domestic supply first, competition always, imports only for verified gaps.”
Under the framework, refiners would have to demonstrate actual deliverable volumes rather than merely claim installed capacity, while domestic and imported products would be subjected to identical quality standards.
The group also called for transparent competitive pricing, plurality in the refining market to prevent dominance and emergency import windows whenever inventories or deliveries fall below clearly published thresholds.
Among its recommendations, CPPE urged NMDPRA to publish a monthly national supply-and-demand balance showing refinery output, domestic evacuation, inventories, consumption, exports, committed deliveries, landed imports and stock-sufficiency days.
It also called for formal supply-gap determinations before major import approvals, transparent opportunities for qualified domestic refiners to fill identified gaps and strict limits on the volume and duration of import permits.
The group wants regulators to audit permitted, financed, shipped and landed volumes, cancel speculative permits, sanction misreporting and prevent the warehousing of import licences.
It further urged the government to ensure adequate domestic crude supply to refineries, strengthen competition oversight and introduce an “industrialisation impact test” for major petroleum import-policy decisions.
Such an assessment, it said, should examine the effects on refinery utilisation, employment, foreign exchange, investment, supplier development, consumer prices and energy security.
Concluding, CPPE said Nigeria had reached a critical juncture where downstream policy must move away from managing chronic import dependence towards 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 group warned.
It said the credibility of Nigeria’s industrialisation agenda would depend partly on whether regulators align their day-to-day decisions with the country’s domestic-refining and economic-development objectives.
