Yemisi Izuora
The World Bank has advised Nigeria to restore competition in the domestic petrol market by reinstating import licences for Premium Motor Spirit (PMS), warning that the current supply structure risks creating a monopoly and pushing local fuel prices above global benchmarks.
In its latest assessment of Nigeria’s economy, the World Bank noted that restrictions on petrol importation have significantly reduced competition in the downstream sector, leaving the market largely dependent on supply from the Dangote Petroleum Refinery.
According to the global financial institution, the limited number of suppliers in the petrol market has created pricing distortions, with domestic petrol prices currently estimated to be about 12 per cent higher than international benchmarks.
The report indicated that as of March 2026, the ex-depot price of petrol in Nigeria stood at approximately ₦1,275 per litre, compared with an estimated import-parity price of around ₦1,122 per litre. The bank warned that the gap reflects reduced competition in the market, which may place additional pressure on consumers and businesses.
The World Bank explained that allowing qualified marketers to resume petrol imports would help introduce competition into the sector, align domestic prices more closely with global market rates, and reduce the risk of supply concentration.
It also warned that higher petrol prices could exacerbate inflationary pressures in Nigeria, given the critical role fuel plays in transportation, manufacturing, and the overall cost of goods and services across the economy.
The bank therefore recommended that the Nigerian government reopen the market to licensed importers while maintaining appropriate regulatory oversight to ensure product quality and supply stability.
However, the institution emphasised that reforms in the petroleum sector should be implemented gradually to avoid disruptions in supply and to maintain energy security during the transition to a more competitive market structure.
The recommendation comes at a time when Nigeria’s downstream petroleum sector is undergoing major changes following the commencement of operations at the Dangote refinery, widely regarded as the largest single-train refinery in the world.
The refinery has significantly increased Nigeria’s domestic refining capacity and reduced dependence on imported fuel, but analysts say maintaining multiple supply sources remains essential for a competitive and efficient fuel market.
The World Bank concluded that fostering a competitive petrol supply environment would help stabilise prices, protect consumers, and strengthen the long-term sustainability of Nigeria’s energy sector.