Industry experts are urging the Nigerian government to reconsider plans to halt the importation of refined petroleum products. They are advising the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to remain steadfast against external pressures.
This call comes in response to comments from the NMDPRA Chief Executive, who indicated that Dangote Refinery was seeking to influence the suspension of import licenses for fuel.
The NMDPRA head stated that he did not acquiesce to this request to prevent monopoly and promote energy security across the nation, a stance that has prompted considerable public backlash and calls for his resignation.
In discussions with our correspondent, energy consultant Henry Adigun criticized the NMDPRA for publicly discussing matters related to the Dangote refinery. He noted that while many of Ahmed’s statements held validity, they should have been handled privately.
According to Adigun, Nigeria should only cease fuel imports once three to four reliable refineries are operational within the country. “Stopping fuel imports now is impractical; we need more functioning refineries to safeguard our energy security. It’s essential that we don’t put all our energy needs in the hands of a single entity,” he stated.
Adigun added that the government must consider the interests of other midstream investors, who could be adversely affected by a hasty importation halt. He pointed out that depot owners, protected under the Petroleum Industry Act, hold rights to import fuel which cannot simply be rescinded. He also clarified that current fuel importers would prefer sourcing from Dangote Refinery when competitive pricing is available.
Dispelling rumors, Adigun asserted that it’s unlikely the Dangote refinery would lead to a drop in pump prices, highlighting that crude costs, whether sourced locally or in naira, will align with international market standards. He indicated that the current landing cost of petrol stands around N1,100 due to production expenses.
This cost could potentially be stabilized if an agreement is reached between the Nigerian National Petroleum Company Limited and the Dangote refinery, allowing fixed pricing independent of international fluctuations.
Dr. Taiwo Ogunleye, another expert in the energy sector, emphasized the fundamental role petroleum plays in both global energy dynamics and economic stability. He pointed out that the Petroleum Industry Act (PIA) mandates the NMDPRA to employ a backward integration strategy that fosters local refining investments.
The PIA also authorizes the regulator to grant import licenses to firms holding active local refining permits or those demonstrating proven international trading capabilities, a power that should not be compromised.
Import license allocations should reflect criteria established by the NMDPRA, which includes refining outputs, market share, competitive pricing, and robust supply chain records, as outlined in the PIA.
The imported petroleum products must align with the Afri-5 Specification (50 ppm sulfur) in line with ECOWAS standards on the Afri-Fuels Roadmap.
Conversely, Eche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria, is advocating for an expedited end to imports. He asserts that local refiners are capable of meeting domestic demand if the government fulfills its commitments to supply crude to local refineries in the local currency.
