The Centre for the Promotion of Private Enterprise (CPPE) has warned that approving petroleum-product import permits without evidence of a genuine domestic supply gap could undermine Nigeria’s growing refining industry.
In a policy report released on Sunday, the CPPE Chief Executive Officer, Dr Muda Yusuf, said uncontrolled import licences could reverse some of the progress made in expanding domestic refining capacity.
“Where domestic supply is genuinely adequate, import permits can suppress refinery offtake, weaken utilisation rates and transfer demand, income and employment abroad,” Mr Yusuf said.
The centre said Nigeria’s downstream petroleum market had reached a critical stage, with the expansion of large-scale private refineries reducing the structural need for continued dependence on imported products.
According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), average daily imports of Premium Motor Spirit (PMS), commonly known as petrol, rose from 5.9 million litres in May to 18.1 million litres in June 2026, an increase of 206.8 per cent.
Imports increased further to 19.7 million litres per day in July, accounting for 43.3 per cent of total PMS receipts, compared with 12.4 per cent in May.
The CPPE said the sharp increase occurred alongside evidence of stronger domestic refining capacity.
It noted that the Dangote Refinery reported a test run above 700,000 barrels per day in June, while NMDPRA data showed that domestic refineries recorded average capacity utilisation of 99.12 per cent in April.
“Nigeria’s seaborne petroleum-product exports have also risen strongly, indicating that aggregate refining capability is no longer the binding constraint it once was,” the report said.
CPPE calls for transparent import policy
The CPPE stressed that it was not opposed to imports where they were required to address a verified supply deficit.
It described imports as a legitimate contingency measure in situations such as refinery outages, seasonal increases in demand, product-quality gaps and the replenishment of strategic stocks.
However, Mr Yusuf said concerns arose when import permits were issued without clear evidence that domestic refiners were unable to meet demand at acceptable quality and competitive prices.
He cited Sections 317(8) to (9) of the Petroleum Industry Act, which he said linked petroleum-product import licensing to the existence of a domestic supply shortfall.
“Regulatory discretion should therefore be exercised transparently, predictably and consistently with the country’s domestic-refining and industrialisation objectives,” he said.
The centre said the policy had implications for foreign-exchange conservation, employment, industrialisation, energy security, investor confidence and fiscal resilience.
It warned that excessive reliance on imports would transfer a significant portion of the economic benefits associated with the downstream sector outside Nigeria.
The CPPE also cautioned that uncertainty over import approvals could discourage investment in refining by making future refinery utilisation and cash flows more difficult to predict.
“If investors believe permits will admit imports irrespective of verified domestic availability, expected refinery utilisation and cash flow become less bankable,” the report stated.
The centre urged the NMDPRA to publish product-by-product assessments of supply gaps before approving significant import volumes.
It also called on the regulator to give domestic refiners a fair opportunity to meet verified demand and limit import permits to quantified residual shortfalls, with clearly defined validity periods.
In addition, the CPPE recommended monthly publication of data covering import permits, product landings and domestic evacuation, as well as a “use-it-or-lose-it” policy to prevent speculative accumulation of import licences.
“This is not a call for monopoly or blanket protection. It is a call for a systematic, rules-based regulation that makes competition fair, protects consumers and supports domestic productive capacity,” Mr Yusuf said.
The centre further called on the Federal Consumer Protection and Competition Commission to strengthen monitoring of the downstream market to prevent monopolistic pricing and abuse of dominant market positions.
It also recommended closer coordination between regulators and the Nigerian Upstream Petroleum Regulatory Commission to establish reliable crude-supply arrangements for domestic refineries.
The CPPE said Nigeria’s downstream petroleum policy should now shift from managing import dependence towards building a competitive domestic refining industry.
“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,” Mr Yusuf said.
