CPPE: 234% Surge in Fuel Import Will Discourage Downstream Investment

Says unexplained reversals in import policy increase uncertainty Dangote Refinery to block petrol importers over quality concerns Dike Onwuamaeze and Peter Uzoho The Centre for the Promotion of Private Enterprise (CPPE) has raised concern over the surge in importation of petrol by 234 per cent within three months, from 5.9 million litres in May 2026 to 19.7 million litres in July 2026. The CPPE said that available data from Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that average petrol import increased from 5.9 million litres per day in May 2026 to 18.1 million litres per day in June, which is a 206.8 per cent increase while the figures rose further to 19.7 million litres per day in July. It highlighted that while import was rising the market share of domestic refineries declined from 41.5 per cent in May 2026 to 32.5 per cent in June 2026 and further 25.8 per cent in July 2026 whereas the market share of imported petrol rose from 12.4 per cent in May to 43.3 per cent of July 2026. According to CPPE, imports should close gaps and not create displacement of domestic refineries because a deregulated market does not imply regulatory indifference to the structure of supply. The centre said that refining is a strategic anchor industry that provides fuels and feed stocks for petrochemicals, plastics, fertiliser, pharmaceuticals, paints, packaging and other manufacturing chains and warned that any policy that displaces viable domestic refining output will contradict Nigeria’s ambition to deepen industrial capacity. Speaking in a policy brief on: “Rising Petroleum-Product Imports and the Future of Domestic Refining,” the Chief Executive of CPPE, Dr. Muda Yusuf, said that the centre’s concern is not with imports required to close a genuine and independently verified domestic shortfall a legitimate contingency tool for refinery outages, seasonal demand spikes, quality gaps and strategic-stock replenishment. Yusuf said that the CPPE’s 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. He said: “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. “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.” He added that Nigeria has reached a point where downstream policy must shift 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. “The required policy is a rules-based regime in which efficient domestic production receives a fair opportunity to serve the Nigerian market, imports close only demonstrable gaps, consumers remain protected and competition is preserved. “The credibility of Nigeria’s industrialisation agenda will be judged partly by whether regulators align their day-to-day decisions with these national objectives,” Yusuf explained. The CPPE stressed that the Petroleum Industry Act (PIA) Sections 317(8) and (9) contemplate petroleum-product import licensing in the context of a domestic supply shortfall and cautioned that regulatory discretion should, therefore, be exercised transparently, predictably and consistently with the country’s domestic-refining and industrialisation objectives. The CPPE also urged the NMDPRA to publish a product-by-product supply gap determination before approving material import volumes; give qualified domestic refiners a fair opportunity to meet verified demand; restrict import permits to the quantified residual gap and a defined validity period; and publish monthly permit, landing and domestic-evacuation data. It said that this is not a call for monopoly or blanket protection but a call for a systematic, rules-based regulation that makes competition fair, protects consumers and supports domestic productive capacity. “Without this information, the market cannot determine whether permits address a real shortfall or merely expand import competition against available domestic output,” CPPE said. Yusuf noted that the import surge occurred alongside evidence of substantial domestic refining capability. According to him, Dangote Refinery reported a test run above 700,000 barrels per day in June, while NMDPRA had reported domestic refineries operating at 99.12 per cent average capacity utilisation in April. Yusuf said that the regulator must reconcile consumer protection and supply security with the PIA’s domestic-supply framework, adding that where domestic supply is genuinely adequate, import permits can suppress refinery offtake, weaken utilisation rates and transfer demand, income and employment abroad. He argued that the NMDPRA’s mandate requires more than licensing and supply monitoring, explaining that it should create predictable rules that encourage investment across refining, storage, pipelines, marine logistics and distribution. “Frequent or unexplained reversals in import policy increase uncertainty and raise the risk premium on downstream investment,” he argued. Meanwhile, the Dangote Petroleum Refinery and Petrochemicals has said it is considering restricting sales of Premium Motor Spirit (PMS) to major marketers that continue to import petrol into Nigeria, amid concerns over product quality, market transparency and the integrity of products supplied under the Dangote brand. In a statement issued last night, the refinery added that the proposed measure, which could take effect as early as this week, subject to further consultations and any last-minute intervention, reflects growing concerns over the continued entry of imported PMS into a market where substantial domestic refining capacity is now available. Sources familiar with the refinery’s position said the immediate concern relates to the fact that some marketers were blending substandard imported PMS with products purchased from Dangote Refinery before distributing the blended product to the market. The refinery said it was concerned that such practices could make it difficult to distinguish between products supplied directly by it and products subsequently blended or handled by third parties. “It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery,” a source familiar with the refinery’s position said. The refinery has also raised concerns about the lack of a standard laboratory by the regulator and quality control infrastructure for imported petroleum products, particularly the capacity to independently verify and certify the specifications of products entering the Nigerian market. The concerns come as Nigeria’s downstream petroleum sector undergoes a structural transition from longstanding import dependence towards greater domestic refining. With a capacity of 700,000 barrels per day, Dangote Petroleum Refinery has emerged as a major supplier of refined petroleum products to both the Nigerian and international markets, supplying products that meet internationally recognised quality specifications. The United States Energy Information Administration (EIA) recently identified the Dangote refinery as a major factor behind the sharp increase in Nigeria’s seaborne petroleum product exports. Nigeria’s seaborne petroleum product shipments averaged 561,000 barrels per day in the second quarter of 2026, compared with an annual average of 79,000 barrels per day in 2023. Dangote Petroleum Refinery’s jet fuel has emerged as a preferred choice in the global market, including across the US and Europe, where the refinery has cemented its position as Europe’s largest external supplier of jet fuel for consecutive months, surpassing traditional exporters from the United States and the Middle East.