Yemisi Izuora
Nigeria’s foremost economist and public affairs analyst, Dr. Muda Yusuf has called for concerted measures to attract massive investment in Nigeria’s downstream energy sector and in particular the petroleum refining industry.
Yusuf, who is also the Chief Executive Officer (CEO), of the Centre for the Promotion of Private Enterprise [CPPE], said Nigeria’s petrol import policy despite huge gains from domestic refining investment is weakening the national economy.
In a recent brief, he said, “Every avoidable litre imported creates demand for foreign exchange for product cost, freight, insurance and associated charges. Domestic refining retains a larger share of value within Nigeria, even where some crude or specialised inputs are imported.”
According to him, refining supports direct technical employment and wider jobs in engineering, maintenance, fabrication, laboratories, haulage, storage, retail, maritime services and professional services while import transfer much of this multiplier abroad.
Yusuf, further explained that refining is a strategic anchor industry which provides fuels and feedstocks for petrochemicals, plastics, fertiliser, pharmaceuticals, paints, packaging and other manufacturing chains. Policy that displaces viable domestic output contradicts Nigeria’s ambition to deepen industrial capacity.
In addition,he argues that domestic refining shortens supply chains and reduces exposure to shipping disruptions, geopolitical conflict, freight shocks and international product shortages. Diversification among several reliable domestic refiners would be more secure than either import dependence or single-refinery dependence.
“Refineries require large, patient and irreversible capital. If investors believe permits will admit imports irrespective of verified domestic availability, expected refinery utilisation and cash flow become less bankable. This could delay expansions and discourage new modular and conventional refinery projects.
“Lower product imports can improve the trade balance, reduce pressure on reserves and strengthen the transmission of exchange-rate stability. Domestic firms also create taxable profits, payrolls and supplier activity.” he added.
He stressed that support for domestic refining should not become protection for inefficiency, monopoly pricing or poor service, adding “The appropriate framework is “domestic supply first, competition always, imports only for verified gaps.”
It should rest on five safeguards:Adequacy: refiners must demonstrate deliverable volumes—not merely nameplate capacity.
“Quality: all domestic and imported products must meet identical specifications.
Competitive pricing: domestic supply should be benchmarked transparently to import-parity fundamentals, adjusted for avoided freight and domestic logistics.
Plurality: policy should encourage several domestic refiners and prevent abuse of dominance.
Consumer protection: emergency import windows should activate promptly when inventories or deliveries fall below published thresholds.”
He called for concerted recommended regulatory action with the publishing of a monthly national supply-and-demand balance.
He challenged the NMDPRA to publish, by product, verified refinery output, domestic evacuation, inventories, consumption, exports, committed deliveries, imports landed and stock-sufficiency days.
Yusuf also urged the Authority that before granting material import volumes, it should publish the size, product, geography, quality specification, duration and evidence supporting the shortfall.
He also said that qualified refiners should have a short, time-bound opportunity to commit supply against the identified gap. Unmet residual demand can then be allocated for importation and permits should correspond to the verified residual gap, contain shipment windows and expire automatically. Open-ended or excessive approvals should be avoided.
He said there is need to compare permitted, financed, shipped and landed volumes; cancel speculative permits; sanction misreporting; and prevent permit warehousing and domestic and imported products should face equivalent quality, tax, levy and disclosure requirements.
The Authority should also publish permit beneficiaries, approved volumes and actual landings, subject only to legitimate commercial confidentiality.
Yusuf said there should be established emergency-import trigger and defined objective thresholds—such as minimum stock days, refinery outage duration or delivery failure that permit accelerated imports without compromising normal domestic-supply discipline.
He called for secure crude supply for domestic refineries and the regulatory Agency 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.
The Federal Consumer Protection and Competition Commission (FCPCC) must be diligent in its regulatory oversight to curb monopolistic pricing tendencies and abuse of dominance power and a major import-policy decisions should assess effects on refinery utilisation, employment, foreign exchange, investment pipelines, supplier development, consumer prices and energy security.
He said thst Nigeria has reached a point where downstream policy must shift decisively from managing chronic import dependence to building a competitive domestic refining ecosystem. 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 required policy is 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.
He added 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.
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