Can Nigeria cut petrol imports without creating a single-supplier risk?
By Sola Adebawo
The latest import permits and court ruling expose a central challenge in Nigeria’s fuel market: how to support domestic refining while keeping supply secure, competition credible and consumers protected.
Nigeria’s petrol debate is often framed as a choice between local refining and imports. That is too simple. Heavy reliance on imports exposes the country to foreign exchange pressure, shipping disruptions and international price shocks.
Heavy reliance on one refinery creates a different vulnerability: an outage, crude-supply constraint or distribution problem could affect a large share of the market.
The policy question is not whether Nigeria should support domestic refining. It should. The question is how to reduce imports without making national supply depend on a single source.
On 23 September, NMDPRA’s spokesperson confirmed that permits approved on 18 September covered about 830,000 tonnes of petrol imports for the fourth quarter. The permits reportedly went to six marketers.
The regulator said they were intended to prevent supply gaps during the year-end period. Individual allocations were not available when the approvals were reported.
The 830,000 tonnes represent approved permits, not evidence that the full volume will be imported. (Premium Times ; TheCable )
In a separate case, decided five days later, a Federal High Court in Abuja ordered NMDPRA to continue granting import licences to Matrix Energy, AA Rano and AYM Shafa, provided they meet the relevant statutory and regulatory requirements. The court held that the regulator’s refusal to issue licences to those companies was inconsistent with its obligations under the Petroleum Industry Act (PIA), including its duty to promote competition.
This was not a blanket licence for every importer. (Reuters ; Premium Times )
At publication on 5 October, Dangote Refinery’s separate challenge to the continued issuance of import licences was scheduled for hearing on 7 October.
The hearing may clarify the legal dispute, but the wider policy question remains: how can Nigeria reduce imports without making domestic supply depend too heavily on one refinery? (Premium Times )
Section 317 of the PIA provides for imports when local refineries cannot meet domestic demand and sets out which companies may be considered for licences. The design supports domestic refining while preserving a route to imported supply when there is a shortfall. The law does not require Nigeria to choose between local refining and a competitive market. (Petroleum Industry Act, 2021 )
The market data show why that balance matters. In August, petrol receipts averaged 50.5 million litres per day: 35.9 million litres from domestic sources and 14.6 million from imports. In July, domestic receipts were lower, at 25.8 million litres per day, while imports averaged 19.7 million. The supply mix can shift quickly. In August, Dangote Refinery supplied about 35.87 million litres per day to the domestic market, roughly 71 per cent of total petrol receipts that month. That is a major contribution, but it also shows how concentrated domestic supply was in one refinery. (TheCable, reporting NMDPRA’s August factsheet ; Punch )
The same August data report consumption of 41.5 million litres per day, measured by volumes trucked into the domestic market, and stock sufficiency of 22.9 days. Those figures provide context for reported receipts of 50.5 million litres per day. But they describe August, not expected demand, stock levels or supply risks in the fourth quarter. They cannot, by themselves, confirm or disprove NMDPRA’s stated reason for approving Q4 permits. (TheCable )
The August figures also show Dangote exporting an average of 9.73 million litres of petrol per day and ending the month with 360.4 million litres in stock, while Nigeria imported petrol. That coexistence does not prove imports were unnecessary. Timing, inventory, distribution, product requirements and commercial arrangements may all matter. The reported data do not establish which factors explain the pattern, so it is a question to examine, not evidence of misconduct or a settled case against imports. (TheCable )
The importers’ case also has a serious supply-security argument. In its court filing, NNPC warned that restricting imports could expose Nigeria to supply disruptions and price instability. It also argued that Dangote had not provided independently verifiable evidence that the refinery could reliably meet the country’s total fuel demand. That is NNPC’s position in litigation, not an established finding. Still, it points to a real distinction: refinery capacity is not the same as dependable nationwide delivery. (Reuters )
Imports are not a cure-all. They expose the market to foreign exchange costs, international product prices, freight and port logistics. Import permits alone do not guarantee lower pump prices. But removing import options when local supply is insufficient could reduce competitive pressure and leave consumers with fewer alternatives.
The practical test is whether the permit decision fits the supply outlook for the period it covers. That means considering expected demand, refinery deliveries, stocks, planned maintenance, imports already in transit, regional availability and product quality. Approved volumes should also be distinguished from volumes actually landed. The August figures matter, but they should not be mistaken for a complete forecast of the fourth quarter.
Competition requires similar care. A competitive market is not simply one with many import licences. It needs clear eligibility rules, credible quality enforcement and safeguards against any operator using market power to disadvantage rivals or consumers. The Abuja court’s emphasis on the regulator’s duty to promote competition under the PIA and the Federal Competition and Consumer Protection Act is relevant. Domestic refining should expand without qualified competitors being shut out through arbitrary decisions. (Premium Times’ report on the ruling
If domestic refining is to replace imports sustainably, it needs reliable crude supply, predictable access to logistics and the ability to compete on price and product quality. If importers remain part of the supply system, their licences should operate under rules that support security of supply rather than avoidable dependence on foreign products. Neither side should be protected from competition at the consumer’s expense.
Nigeria can reduce petrol imports. The August data show that local supply can lead the market, but also that Dangote alone supplied about 71 per cent of total petrol receipts that month. Import reduction should be a result of reliable domestic output, not an end in itself. The goal is not to replace dependence on foreign suppliers with dependence on one domestic supplier. It is to build a market where local refineries lead, imports cover demonstrable gaps and clear rules protect consumers from both shortages and excessive concentration.
That is the balance the PIA requires. Whether the Q4 permits strike it will be judged by what happens to supply, stocks, competition and prices through the end of the year.
Sola Adebawo is an energy industry executive, strategic adviser and thought leader with 30 years of experience in the oil and gas industry, including senior leadership roles across Africa’s upstream petroleum sector. He is the Chief Executive Officer of Hyphen Partners Limited, a specialist advisory firm focused on policy and regulatory intelligence, market entry, stakeholder strategy, and executive and institutional positioning in complex, highly regulated industries. A former executive at Chevron and Heritage Energy, he is an author, scholar and ordained minister. His writing explores energy policy, political economy, corporate governance, strategic communication, leadership, the relationship between institutions and public life, and the forces shaping Africa’s development.
