How reliance on imported fuel cost Nigeria $15bn annually – CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has revealed how Nigeria’s long-standing dependence on imported petroleum products cost the country between $10 billion and $15 billion annually at its peak, warning against policies that could revive such a trend. The group raised the concern while reacting to recent recommendations by the World Bank, […]

The Centre for the Promotion of Private Enterprise (CPPE) has revealed how Nigeria’s long-standing dependence on imported petroleum products cost the country between $10 billion and $15 billion annually at its peak, warning against policies that could revive such a trend.

The group raised the concern while reacting to recent recommendations by the World Bank, which suggested increased importation of fuel and food as a response to Nigeria’s supply-side constraints.

In a statement issued on Sunday, CPPE described the recommendation as “deeply troubling,” stressing that Nigeria’s historical reliance on fuel imports significantly weakened the economy, drained foreign exchange reserves and contributed to the collapse of domestic refining capacity.

According to the Chief Executive of CPPE, Dr. Muda Yusuf, the import regime also encouraged rent-seeking behaviour and created structural inefficiencies that left the country vulnerable to global energy shocks.

He noted that while the World Bank, in its April 2026 Nigeria Development Update, acknowledged improvements in Nigeria’s macroeconomic stability, its recommendation for increased imports risks reversing recent progress.

In its April 2026 Nigeria Development Update (NDU), the World Bank highlighted that while Nigeria has made progress in stabilising its macroeconomy, households continue to feel the pinch of high inflation.

It noted that domestic fuel prices surged sharply between February and March 2026, with diesel prices nearly doubling in some regions, contributing to rising costs across the economy.

The Bank said that the suspension of import licenses since January 2026 has reduced competition, allowing prices to exceed import-parity levels.

However, CPPE argued that import expansion is not a sustainable solution. Instead, it emphasised that Nigeria is beginning to record positive trends in key indicators such as exchange rate stability, foreign reserves and moderating inflation—gains that should be protected.

The organisation highlighted recent advances in domestic refining, driven by private sector investments, as a turning point for the country’s energy security.

Yusuf said Nigeria’s transition towards local sufficiency in petroleum supply should be strengthened through deliberate policies that promote domestic production, value addition and stronger industrial linkages.

He warned that returning to heavy fuel importation could once again put pressure on foreign exchange, discourage local investments in refining and expose the economy to external volatility, especially in a fragile global energy market.

Beyond fuel, the CPPE also cautioned against an overreliance on import-driven economic strategies, insisting that sustainable growth must be anchored on industrialisation, manufacturing competitiveness and increased agricultural productivity.

The group urged the World Bank to align its policy advisory with Nigeria’s long-term development priorities, particularly by supporting reforms that boost domestic capacity rather than encouraging import dependence.

According to the CPPE, Nigeria’s past experience clearly demonstrates that excessive reliance on imported fuel is costly, unsustainable and ultimately damaging to economic stability.

“Nigeria is gradually transitioning towards greater self-sufficiency in petroleum products supply, driven by significant private investments in domestic refining capacity. This momentum should be strengthened through deliberate policies that support local production, enhance value addition, and deepen industrial linkages within the economy.

“Encouraging increased importation of petroleum products at this stage risks reversing hard-won gains. It would exacerbate foreign exchange pressures, weaken domestic refining investments, and heighten the economy’s vulnerability to external shocks—particularly in a global environment characterized by geopolitical tensions and energy market volatility,” he said.