Petrol imports surge despite rising local refining capacity — CPPE

Nigeria’s petrol imports surged by 233.9 per cent between May and July 2026, despite a significant expansion in domestic refining capacity, raising fresh concerns over the future of local refining and the country’s dependence on imported petroleum products.
The Centre for the Promotion of Private Enterprise, CPPE, disclosed this in a policy brief on rising petroleum-product imports and the future of domestic refining, citing data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA.
The data showed that average daily Premium Motor Spirit (PMS), also known as petrol, imports rose to 18.1 million litres in June and 19.7 million litres in July from 5.9 million litres in May 2026.
Over the same period, domestic petrol supply fell to 32.5 million litres in June and 25.8 million litres in July from 41.5 million litres per day in May 2026.
As a result, imported petrol accounted for 43.3 per cent of total petrol receipts in July, compared with just 12.4 per cent in May.
CPPE Chief Executive Officer, Dr. Muda Yusuf, described the development as a major policy concern, particularly as Nigeria’s domestic refining capacity has expanded.
“Petroleum-product imports should function as a transparent supply-gap instrument—not as a parallel market that displaces adequate domestic production,” Yusuf said.
He added: “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.”
The development comes as the Dangote Petroleum Refinery has significantly increased Nigeria’s potential domestic refining capacity, while other refineries are expected to contribute to local supply.
CPPE noted that Dangote Refinery reported a test run above 700,000 barrels per day in June, while NMDPRA had earlier reported average domestic refinery capacity utilisation of 99.12 per cent in April.
The centre said the issue was therefore not whether Nigeria should completely eliminate imports, but whether imports were being approved on the basis of demonstrable supply shortfalls.
“Imports remain a legitimate contingency tool for refinery outages, seasonal demand spikes, quality gaps and strategic-stock replenishment,” Yusuf said.
“The 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.”

‘Imports should close gaps—not create displacement’

CPPE said the regulatory framework should clearly distinguish between imports needed to address genuine shortages and imports that compete with available domestic supplies.
“A deregulated market does not imply regulatory indifference to the structure of supply,” the centre stated.
It argued that where domestic supply is adequate, excessive import approvals could “suppress refinery offtake, weaken utilisation rates and transfer demand, income and employment abroad.”
The organisation therefore called on NMDPRA to establish and publish the actual supply gap before approving significant import volumes.
“A credible supply-gap assessment should disclose projected demand, verified domestic production and inventory, committed refinery deliveries, product specifications, logistics constraints and the precise residual volume requiring imports,” it said.

Demand for import transparency

CPPE wants NMDPRA to publish a monthly national supply-and-demand balance covering refinery output, domestic evacuation, inventories, consumption, exports, committed deliveries, imports landed and stock-sufficiency days.
It also called for a formal determination of the size and duration of any supply shortfall before issuing material import approvals.
“Import permits should correspond to the verified residual gap, contain shipment windows and expire automatically,” CPPE said.
It also proposed that qualified domestic refiners should be given a short, time-bound opportunity to supply any identified shortfall before the residual volume is allocated to importers.
The organisation further called for the publication of import permit beneficiaries, approved volumes and actual landed quantities, subject to legitimate commercial confidentiality.

FX, jobs and industrialisation at stake

CPPE said the consequences of avoidable imports extend beyond the downstream petroleum market.
“Every avoidable litre imported creates demand for foreign exchange for product cost, freight, insurance and associated charges,” it stated.
It also argued that domestic refining generates broader economic activity through engineering, maintenance, fabrication, haulage, storage, maritime and professional services.
“Refining is a strategic anchor industry,” the centre said, noting that the sector provides fuels and feedstocks for petrochemicals, plastics, fertiliser, pharmaceuticals, paints, packaging and other manufacturing activities.
It warned that policy decisions that displace viable domestic output could undermine Nigeria’s industrialisation ambitions.

Crude supply remains critical

However, CPPE said efforts to limit product imports must be matched by reliable crude supplies to domestic refineries.
“Product-import restraint without feedstock security would be internally inconsistent,” it stated.
The centre called for coordination between NUPRC, NMDPRA and oil producers to ensure credible domestic crude-supply obligations, commercially workable pricing and reliable delivery.
CPPE stressed that its position was not a call for a blanket ban on imports or protection of inefficient refiners.
“The appropriate framework is ‘domestic supply first, competition always, imports only for verified gaps’,” it said.
It added that domestic refiners must demonstrate deliverable volumes, meet the same quality requirements as imported products and compete on price, while emergency import windows should remain available when inventories or refinery deliveries fall below clearly defined thresholds.
CPPE also urged stronger competition oversight to prevent monopolistic pricing and abuse of market dominance.
It said Nigeria had reached a point where downstream policy should move “decisively from managing chronic import dependence to building a competitive domestic refining ecosystem.”
“The credibility of Nigeria’s industrialisation agenda will be judged partly by whether regulators align their day-to-day decisions with these national objectives,” the centre stated.