Rising fuel imports could cripple local refineries – CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has warned that rising fuel imports could severely impact Nigeria's domestic refining sector. In a recent policy report, CPPE CEO Dr Muda Yusuf argued that unchecked import licensing could reverse the gains made from expanding local refining capacity. The report highlights that Nigeria's downstream petroleum market has reached an important transition point, with large-scale private refining significantly reducing the need for import dependence.

Import permits have surged from 5.9 million litres in May to 19.7 million litres in July, accounting for 43.3% of total Premium Motor Spirit (PMS) receipts in July, up from 12.4% in May. Yusuf noted that the surge in imports coincided with strong domestic refining capabilities, citing the Dangote Refinery's test run above 700,000 barrels per day in June and average capacity utilisation of 99.12% for domestic refineries in April.

However, the CPPE cautioned that import permits should only be granted when there is a genuine demonstration of a domestic supply shortfall, as imports transfer much of the economic multiplier abroad and could discourage investment in the refining sector.

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