…Advocates Basing Imports To Verified Domestic Supply Gaps
The Centre for the Promotion of Private Enterprise (CPPE), a leading organized private sector (OPS) advocacy group in Nigeria, has expressed serious concern over a 234 per cent increase in Nigeria’s petrol importation from May to July this year, despite the nation’s improving domestic refining capacity.
The OPS advocacy group, in a Policy Brief signed by its Director/Chief Executive Officer, Dr Muda Yusuf, on rising petroleum product imports and the future of domestic refining, noted that average daily Premium Motor Spirit (PMS) imports rose from 5.9 million litres in May to 18.1 million litres in June, representing a 206.8 per cent increase.
It maintained that the PMS imports further increased to 19.7 million litres daily in July, accounting for 43.3 per cent of total PMS receipts, compared with 12.4 per cent in May, while also noting that domestic PMS supply dips from 41.5 million litres daily in May to 32.5 million litres in June and 25.8 million litres in July.
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In its central theme of the Policy Brief, the CPPE stressed that it believed that “petroleum-product imports should function as a transparent supply-gap instrument—not as a parallel market that displaces adequate domestic production. 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.”
According to the Centre, its main concern is not with imports required to close a genuine and independently verified shortfall as imports remain a legitimate contingency tool for refinery outages, seasonal demand spikes, quality gaps and strategic-stock replenishment.
It clarified that the policy concern arose where import permits are issued without a transparent demonstration that domestic refiners cannot meet the relevant demand at acceptable standards and competitive market terms.
Citing the legislative hub on which its stance is anchored, the OPS advocacy group stated the distinction remained central to the Petroleum Industry Act (PIA). Sections 317(8)–(9) contemplate petroleum-product import licensing in the context of a domestic supply shortfall.
The CPPE harped on the need to ensure that regulatory discretion should be exercised transparently, predictably and consistently with the country’s domestic-refining and industrialisation objectives.
To ensure this, the Centre advocated: “NMDPRA should publish a product-by-product supply-gap determination before approving material import volumes; give qualified domestic refiners a fair opportunity to meet verified demand; restrict import permits to the quantified residual gap and a defined validity period; and publish monthly permit, landing and domestic-evacuation data.
“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”, it added.
Following a critical appraisal of the PMS and other petroleum products importation value chains and the observed lapses in the processes, the Centre canvassed a 10-point remedial measure that should be adopted by the government to reverse the current fuel importation regime.
Specifically, it advised that a monthly national supply-and-demand balance should be published by the NMDPRA by product, verified refinery output, domestic evacuation, inventories, consumption, exports, committed deliveries, imports landed and stock-sufficiency days; and that before granting material import volumes, the Authority should publish the size, product, geography, quality specification, duration and evidence supporting the shortfall.
To offer domestic refiners a transparent right to respond, the Centre recommended that qualified refiners should have a short, time-bound opportunity to commit supply against the identified gap while unmet residual demand can then be allocated for importation.
On quantify and time-limit import permits, the Centre maintained that permits should correspond to the verified residual gap, contain shipment windows and expire automatically. Open-ended or excessive approvals should be avoided.
In addition, it advocated that audit performance and enforcement of use-it-or-lose-it rules should be applied to compare permitted, financed, shipped and landed volumes; cancel speculative permits; sanction misreporting; and prevent permit warehousing.
The CPPE further recommended that domestic and imported products should face equivalent quality, tax, levy and disclosure requirements. Publish permit beneficiaries, approved volumes and actual landings, subject only to legitimate commercial confidentiality; while the NMPRDA should also establish an emergency-import trigger to define objective thresholds—such as minimum stock days, refinery outage duration or delivery failure—that permit accelerated imports without compromising normal domestic-supply discipline.
To secure crude supply for domestic refineries, the OPS advocacy group advised that the NMPRDA should coordinate with NUPRC and producers to ensure credible domestic crude-supply obligations, commercially workable pricing and reliable delivery. Product-import restraint without feedstock security would be internally inconsistent.
To strengthen competition oversight, it also charged the Federal Consumer Protection and Competition Commission (FCPCC) to be diligent in its regulatory oversight to curb monopolistic pricing tendencies and abuse of dominance power, while the NMPRDA should adopt an industrialisation impact test to ensure that major import-policy decisions should assess effects on refinery utilisation, employment, foreign exchange, investment pipelines, supplier development, consumer prices and energy security.
In its concluding advocacy stance, the CPPE noted that Nigeria had reached a point where downstream policy must shift decisively from managing chronic import dependence to building a competitive domestic refining ecosystem.
It warned that 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.
The Centre pointed out that the required policy should be a rules-based regime in which efficient domestic production receives a fair opportunity to serve the Nigerian market, imports close only demonstrable gaps, consumers remain protected and competition is preserved, adding that the credibility of Nigeria’s industrialisation agenda will be judged partly by whether regulators align their day-to-day decisions with these national objectives.
