New petrol import permits may affect domestic refining goals, Group tells Tinubu

An energy policy group has advised President Bola Ahmed Tinubu to carefully consider the broader economic implications of newly issued permits allowing marketers to import petrol into the country, warning that the move could affect Nigeria’s ongoing efforts to strengthen domestic refining and stabilise the economy. In a statement on Sunday in Abuja, the Energy […]

An energy policy group has advised President Bola Ahmed Tinubu to carefully consider the broader economic implications of newly issued permits allowing marketers to import petrol into the country, warning that the move could affect Nigeria’s ongoing efforts to strengthen domestic refining and stabilise the economy.

In a statement on Sunday in Abuja, the Energy Transparency and Market Justice Initiative (ETMJI) said the approvals granted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) could produce unintended consequences if not carefully managed.

The group’s president, Dr. Salako Kareem, said Nigeria was at a delicate moment in its energy transition and that policy choices made now would influence whether the country eventually reduces its long-standing dependence on imported refined petroleum products.

Kareem said while the regulator’s responsibility to guarantee adequate fuel supply is understood, expanding import permissions at this stage could weaken the policy direction required to encourage local production and long-term sector stability.

“Our respectful appeal to President Bola Ahmed Tinubu is that decisions concerning petrol importation must be carefully weighed against their long-term economic consequences,” Kareem said.

“Nigeria has spent decades trying to overcome the paradox of being a major crude oil producer while relying heavily on imported refined products. Any policy action that significantly expands petrol importation could slow the progress being made toward strengthening domestic refining capacity.”

He warned that increasing petrol imports could place additional pressure on the country’s foreign exchange reserves, especially at a time when the government is pursuing economic reforms aimed at stabilising the naira and improving fiscal discipline.

“For many years, the country has expended substantial volumes of foreign exchange importing petroleum products that could ideally be refined locally,” Kareem said.

“If import volumes begin to rise again, the demand for foreign currency could also increase. This may place additional pressure on the naira and complicate the broader economic stabilisation programme that the government is currently pursuing.”

The group also cautioned that heavy reliance on imported petrol could create conditions that make market monitoring more complex, including potential risks related to product quality and supply chain transparency.

According to Kareem, Nigeria’s downstream sector has historically faced regulatory and quality-control challenges during periods when fuel importation was widespread, partly because imported products often pass through multiple intermediaries before reaching domestic depots.

“One of the lessons from the past is that when imports dominate the supply chain, the market may become more vulnerable to the dumping of inferior petroleum products,” he said.

“This not only creates regulatory complications but may also expose consumers to fuels that could affect vehicles, industrial machinery and ultimately impose hidden economic costs on the country.”

He added that encouraging domestic refining and strengthening local supply chains could improve product traceability and enhance overall market transparency.

Kareem stressed that the group’s intervention was not intended as criticism of the NMDPRA, noting that regulators often make complex decisions to prevent supply disruptions in a volatile energy market.

However, he urged the federal government to ensure that short-term supply management does not weaken long-term national objectives in the petroleum sector.
“We recognise that the regulator has the responsibility to ensure that Nigerians do not experience fuel shortages, and that duty is extremely important,” he said.

“But at the same time, policy coherence is essential. The country must avoid sending signals that could discourage investment in local refining or create uncertainty about Nigeria’s commitment to energy self-sufficiency.”

Kareem said Nigeria now has a rare opportunity to restructure its downstream petroleum industry in a way that strengthens domestic production, protects foreign exchange reserves and builds long-term industrial capacity.

He urged the president to ensure that the country’s regulatory framework reflects that strategic vision.

“Our appeal is simply for policy alignment. If Nigeria truly wants to build a resilient energy economy, then every major decision in the downstream sector must reinforce the goal of reducing import dependence, strengthening domestic production and protecting the country’s economic stability,” Kareem noted.

The group added that careful policy coordination between regulators and the presidency would help ensure that Nigeria avoids repeating fuel import cycles that have historically placed significant financial pressure on the national economy.