Experts warn FG against rebound in petrol imports

Nigeria’s sudden rebound in imported petroleum products, especially Premium Motor Spirit (PMS), commonly known as petrol, is generating shockwaves in the industry, with experts/analysts warning the Federal Government on the negative implications if  the situation goes unchecked

The experts, comprising the former Director-General, Lagos Chambers of Commerce and Industry, Dr Muda Yusuf and Public Relation Officer, Crude Oil Refinery-Owners Association of Nigeria (CORAN), Mr. Eche Idoko, warned that unchecked fuel imports at the expense of local production would lead to severe macroeconomic damage, weakening foreign exchange reserves, exporting local employment, and eroding investor confidence in domestic manufacturing.

The warning is coming following the official data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which revealed that average daily imports of Premium Motor Spirit (PMS) rose sharply to 19.7 million litres per day in July 2026, accounting for 43.3 per cent of total national receipts—up from 12.4 per cent in May.

Also, as a result of this, Dangote Refinery, last week,

threatened to export excess petrol stocks, saying the rising imports have created uncertainty around domestic demand and made inventory planning increasingly difficult.

Worried by the development, Dr. Muda Yusuf – led Centre for the Promotion of Private Enterprise (CPPE), on Sunday, outlined the structural economic risks the nation will face if fuel imports continue at the expense of local production.

He cautioned that granting import permissions without verifying domestic supply shortfalls would force Nigeria to repeat legacy structural failures.

​“The primary systemic threat remains the unnecessary exposure of the Naira to foreign exchange capital flight.

“Every imported tanker of petrol requires substantial hard-currency outlays to cover: Free-on-Board (FOB) fuel costs, international ocean freight, ​maritime insurance and trade financing fees.

“Processing crude oil locally retains these value-added margins within Nigeria, preserving hard currency even when specialised inputs are imported,” he said.

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Reverting to high import volumes by NMDPRA, he said, would increase demand for foreign exchange, place avoidable pressure on central bank reserves, and exacerbate currency volatility.

He explained that fuel import reliance would effectively transfer the multiplier benefits of industrial activity abroad, noting that multi-billion-dollar domestic facilities, such as the 650,000 bpd Dangote Petroleum Refinery, anchor extensive domestic job ecosystems.

Allowing foreign fuel to displace local production, he said, would threaten skilled positions across several sectors.

​According to him, when import permits bypass operational local refineries, the employment opportunities, along with corresponding income and payroll taxes, are exported to foreign refining hubs.

​Downstream energy assets, Yusuf said, require massive, illiquid, and long-term capital commitments, pointing out that financial institutions and private investors rely on predictable off-take volumes and stable utilisation rates to service debt obligations.

“​If regulatory policy allows import volumes to compete freely against domestic production without verified supply gaps, local capacity utilization drops. Unpredictable import surges raise the risk premium on Nigerian energy infrastructure, potentially halting expansions, delaying modular refinery projects, and signaling to foreign direct investors that capital deployment in Nigeria’s industrial sector carries policy risks,” he said.

CPPE noted that while imports remain an essential backup tool for emergency outages or seasonal spikes, using them to displace functional local refining risks destabilizing the broader economy.  

The spokesperson of CORAN, Eche Idoko, who corroborated Yusuf, urged the country to urgently address the challenges surrounding domestic crude supply to local refineries, particularly the commercial and pricing terms under which crude is made available.

According to him, local refiners require a predictable, competitive and sustainable crude supply framework if they are to operate efficiently and compete with imported products.

He suggested the need to enforce backward integration and protect local refining

“There is also a need for stronger enforcement of the backward-integration provisions and policy objectives under the Petroleum Industry Act (PIA). The regulatory framework should deliberately encourage investment in domestic refining capacity and ensure that importation does not undermine existing and emerging local refineries,” the spokesperson of CORAN said.

According to him, Nigeria cannot sustainably pursue energy security while simultaneously creating a commercial environment that favours imports over domestic

He pointed out that unchecked petrol import would increase pressure on foreign exchange.

According to him, Nigeria’s foreign exchange position will inevitably come under increased pressure if dependence on imported petroleum products continue to rise.

“The ultimate beneficiaries will largely be international trading companies, many of which maintain little more than trading desks in Nigeria, while significant value and foreign exchange continue to leave the country,” he said.