CPPE asks NMDPRA to link petrol imports to real supply shortages

The Centre for the Promotion of Private Enterprise (CPPE) has asked the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to connect petrol import approvals to clear domestic supply shortages.

The group stated that petrol imports should be a backup for real supply shortages. They should not create a market that pushes out local production.

The CPPE made this request in a policy brief released on Sunday by its Chief Executive Officer, Muda Yusuf. The brief is titled “Policy Brief on Rising Petroleum-Product Imports and the Future of Domestic Refining.”

The CPPE pointed out that when local refineries can provide products that meet quality and quantity standards at fair prices, issuing too many import licenses could harm investment, jobs, foreign-exchange savings, industrial growth, and national energy safety.

Increase in Petrol Imports

This call comes as petrol imports rise, even with more capacity in Nigeria’s refineries.

According to the CPPE brief and data from NMDPRA’s June and July 2026 monthly statistics, average daily Premium Motor Spirit (PMS) imports grew from 5.9 million litres in May to 18.1 million litres in June and 19.7 million litres in July.

Imported petrol accounted for 12.4 percent of total PMS receipts in May. This increased to 35.8 percent in June and 43.3 percent in July.

Meanwhile, domestic PMS supply fell from 41.5 million litres per day in May to 32.5 million litres in June and 25.8 million litres in July. Total PMS receipts dropped from 47.4 million litres in May to 45.5 million litres in July.

Mr Yusuf said the rise in imports should lead to a clear look at how domestic production relates to market demand. He said, “The concern is not with imports required to close a genuine and independently verified shortfall.”

The group recognizes imports as a valid tool for refinery downtime, seasonal demand spikes, quality issues, and restocking.

Call for Transparency

But they argued that import permits should only be given if it is clear that local refineries cannot meet demand at acceptable standards and prices.

This situation comes as Nigeria’s refining sector is changing, especially with the Dangote Petroleum Refinery boosting its operations and other refineries returning to service.

Dangote Refinery has a capacity of 650,000 barrels per day. It surpassed this capacity in June, reaching over 700,000 barrels per day, according to the company.

The refinery is becoming a major supplier of refined products to Nigeria and neighboring markets. Still, it faces challenges in getting enough domestic crude supplies.

Against this backdrop, Mr Yusuf said Nigeria needs better rules to decide when imports are really necessary. He pointed to Sections 317(8) and (9) of the Petroleum Industry Act. These sections suggest that import licenses should be based on domestic supply shortages.

The CPPE called for consistent and open regulatory decisions that align with Nigeria’s refining and industrial goals.

Need for Accurate Assessments

Mr Yusuf said a reliable assessment of supply gaps should include projected demand, verified local production, inventory levels, committed refinery deliveries, product specs, logistics issues, and the exact volume needing imports.

“Without this information, the market cannot tell if permits address a real shortfall or just increase import competition against local production,” he said.

The group noted that a deregulated market does not mean regulators should ignore supply issues. They added that regulators must balance consumer protection and supply security with the domestic-supply framework in the Petroleum Industry Act.

They argued that if local supply is genuinely enough, import permits could lower refinery output, reduce utilization rates, and shift demand and jobs abroad.

Encouraging Domestic Refining

Mr Yusuf also asked NMDPRA to set clear rules to boost investment in refining, storage, pipelines, marine logistics, and product distribution.

He warned that frequent or unclear changes in import policy could make investors hesitant and increase risks in downstream investments.

According to CPPE, the latest import figures also affect Nigeria’s foreign-exchange situation. The group stated that every litre of unnecessary imported products creates demand for foreign exchange to cover costs, shipping, insurance, and other fees.

In contrast, local refining could keep more value in Nigeria, even if some crude or special inputs are imported.

The CPPE said domestic refining also creates jobs in engineering, maintenance, fabrication, laboratories, haulage, storage, retail, maritime services, and professional services.

Strategic Importance of Refining

Mr Yusuf described refining as a key industry because it provides fuels and materials for petrochemicals, plastics, fertilizers, pharmaceuticals, paints, packaging, and other manufacturing activities.

The group believes that stronger local refining capacity would enhance energy security by shortening supply chains and reducing Nigeria’s vulnerability to shipping problems, global conflicts, freight issues, and international product shortages.

They said having multiple reliable domestic refiners would provide better security than relying on imports or a single refinery.

The CPPE also warned that uncertainty over import policy could affect investment decisions in refining, as refineries need large, stable investments.

“If investors think permits will allow imports regardless of available local supply, expected refinery utilization and cash flow become less secure,” the group said.

Lower imports could also help Nigeria's trade balance, ease pressure on foreign-exchange reserves, and improve exchange-rate stability.

The group added that local refiners would also contribute through taxes, payroll, and business with local suppliers.

Caution on Domestic Support

Mr Yusuf cautioned that supporting local refining should not cover up inefficiency, high prices, or poor service.

He suggested a framework where local supply is prioritized, competition is encouraged, and imports are only for verified shortages.

In this framework, refiners would need to show they can deliver volumes, not just claim capacity.

The group said both local and imported products must meet the same quality standards. It also called for local supply to be compared fairly against import costs, adjusted for local shipping.

They urged the government to support several local refiners and prevent market abuse while allowing emergency imports when supplies fall below set levels.

Need for Monthly Supply Reports

To achieve this, the CPPE asked NMDPRA to publish a monthly supply-and-demand report, showing product types, verified refinery output, local evacuation, inventories, consumption, exports, committed deliveries, imported volumes, and stock days.

They suggested that before granting large import volumes, the regulator should publish a formal decision on supply gaps, detailing size, product type, location, quality, duration, and proof of shortages.

Qualified local refiners should then have a short, set time to fill the identified gaps. After that, any unmet demand could go to imports.

The CPPE called for import permits to match verified gaps, have set shipment times, and expire automatically.

Mr Yusuf said regulators should check permitted, financed, shipped, and landed volumes, cancel speculative permits, punish false reporting, and stop the hoarding of import permits.

The group also asked for equal quality, tax, and disclosure standards for local and imported products. They urged NMDPRA to publish the names of permit holders, approved volumes, and actual landings, keeping only legitimate commercial secrets.

They proposed an emergency-import trigger based on clear indicators, like minimum stock days, refinery downtime, or delivery failures, allowing faster imports when needed without undermining regular local supply rules.

The CPPE called for better coordination among NMDPRA, the Nigerian Upstream Petroleum Regulatory Commission, and oil producers to ensure a steady supply of crude to refineries.

They said limiting product imports without securing enough crude for local refineries would be contradictory.

The group also urged the Federal Competition and Consumer Protection Commission to enhance market oversight to prevent unfair pricing and market abuse.

They recommended that major decisions on petroleum product imports be reviewed for their impact on industrial growth, taking into account refinery utilization, jobs, foreign exchange, investment, supplier development, consumer prices, and energy security.

This call comes as Nigeria’s downstream petroleum sector shifts away from relying heavily on imported refined products to boosting local production.

The Dangote refinery has increased its output and exports, while other refineries have also resumed operations. Meanwhile, crude supply remains a significant barrier for local refineries. Dangote mentioned in July that it still imports a lot of its crude needs due to inadequate local supplies.

So, the rise in petrol imports does not mean all imports are unnecessary. A drop in local output, refinery maintenance, crude supply issues, logistics challenges, or other temporary setbacks can create real shortages that need imports.

The main issue raised by the CPPE is how these gaps are identified and whether the approved import volumes match the real demand.

The group feels Nigeria has reached a point where downstream policy should focus on building a competitive local refining sector instead of just managing import dependence.

“Allowing imports without a transparent, verified shortage would waste a historic chance to save foreign exchange, create jobs, strengthen industrial ties, and boost energy security,” Mr Yusuf said.

He added that the right policy should give efficient local producers a fair chance to serve the Nigerian market, while allowing imports only to fill clear gaps.

The CPPE believes the success of Nigeria’s industrial goals will rely partly on whether regulators align their daily actions with the country’s aim to grow local production, save foreign exchange, create jobs, and enhance energy security.