CPPE Raises Concerns Over Rising Petrol Imports

Nigeria’s reliance on imported petrol has surged sharply, with Premium Motor Spirit (PMS) imports accounting for 43.3 per cent of total petrol receipts in July 2026, despite growing domestic refining capacity.

This trend has raised concerns, according to the Centre for the Promotion of Private Enterprise (CPPE), about the sustainability of renewed dependence on foreign-refined petroleum products at a time when the country aims to deepen local refining and reduce foreign exchange pressure.

In a policy brief released on Sunday, CPPE noted that average PMS imports jumped from 5.9 million litres per day in May 2026 to 18.1 million litres per day in June—a 206.8 per cent increase. Imports climbed further to 19.7 million litres per day in July, while their share of total PMS receipts rose from 12.4 per cent in May to 35.8 per cent in June and 43.3 per cent in July.

CPPE highlighted that this marks a sharp reversal in Nigeria’s downstream petroleum market, especially as large-scale private refining has expanded domestic supply capacity.

The organisation clarified that imports are a legitimate contingency for addressing genuine supply shortfalls—such as during refinery outages, seasonal demand spikes, or to replenish strategic stocks. However, it questioned the rationale for approving significant import volumes without clear evidence that domestic refiners cannot meet demand in terms of quality, quantity, and competitive pricing.

CPPE called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to publish a transparent product-by-product supply-gap assessment before approving large import volumes. It recommended giving qualified domestic refiners priority in meeting demand, with import permits restricted to verified residual gaps and limited validity periods.

The think tank warned that indiscriminate import licensing could weaken refinery utilisation, discourage investment, increase foreign exchange demand, and transfer jobs and economic value out of Nigeria.

Evidence of substantial domestic refining capability was cited, including Dangote Refinery’s reported test run above 700,000 barrels per day in June and NMDPRA’s report of average domestic refinery capacity utilisation of 99.12 per cent in April. Nigeria’s seaborne petroleum-product exports have also increased significantly, suggesting that refining capability is no longer the main constraint.

CPPE argued that every avoidable litre of imported petroleum products increases foreign exchange demand through product costs, freight, insurance, and related charges. In contrast, domestic refining retains a larger share of value in Nigeria, supporting employment across engineering, maintenance, fabrication, logistics, and more.

Beyond the immediate fuel market, CPPE emphasised that refining serves as a strategic anchor for industrialisation, providing fuels and feedstocks for sectors such as petrochemicals, plastics, fertilisers, pharmaceuticals, paints, and packaging. Policies that displace viable domestic output, the organisation warned, could undermine Nigeria’s broader industrialisation goals.

CPPE proposed a policy framework based on “domestic supply first, competition always, imports only for verified gaps.” This would require refiners to demonstrate deliverable volumes—not just installed capacity—and ensure that domestic and imported products meet identical quality standards.

The organisation also urged the adoption of transparent pricing benchmarks, increased competition among domestic refiners, and emergency import windows activated only when inventories or deliveries fall below set thresholds.

CPPE called on NMDPRA to publish monthly national supply-and-demand balances, detailing refinery output, domestic evacuation, inventories, consumption, exports, committed deliveries, landed imports, and stock-sufficiency days. The regulator should disclose the size, product type, geography, quality specification, duration, and supporting evidence for any identified supply shortfall before granting significant import permits.

Import permits, CPPE recommended, should match verified residual demand, include shipment windows, and expire automatically. Speculative or unused permits should be cancelled.

CPPE concluded that Nigeria has reached a point where downstream petroleum policy should shift from managing chronic import dependence to building a competitive domestic refining ecosystem. While imports should remain available to fill demonstrable supply gaps, efficient domestic producers must have a fair opportunity to serve the market, ensuring consumer protection and healthy competition.