World Bank Advocates for Renewed Petrol Imports in Nigeria to Enhance Market Competition
The World Bank has issued a strong recommendation to the Federal Government of Nigeria, urging the immediate reopening of petrol import licenses to foster greater competition and reduce consumer prices. In its latest Nigeria Development Update, the bank highlighted that the suspension of import licenses since January 2026 has stifled market contestability, leading to prices exceeding import-parity levels and burdening consumers with unnecessary costs.
According to the report, imported petrol is currently approximately 12 percent cheaper than fuel produced by the Dangote Petroleum Refinery. The World Bank emphasized that restoring competition would align domestic prices with global benchmarks, strengthen supply security by diversifying sourcing options, and support macroeconomic stability amid volatile global crude prices.
Marketers Demand Full Deregulation in Line with Petroleum Industry Act
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has welcomed the World Bank's stance, arguing that restricting imports contradicts the principles of the Petroleum Industry Act (PIA). Chinedu Ukadike, IPMAN National Publicity Secretary, stated that limiting import licenses shrinks the market and weakens competition, calling for the government to withdraw from import licensing entirely and allow market forces to determine prices.
Ukadike also questioned the sustainability of relying heavily on domestic supply, citing multiple price hikes by the Dangote Refinery within a short period. He advocated for allowing imports to enable competition to dictate consumption and pricing, aligning with the PIA's goal of a deregulated market.
Experts Caution Against Undermining Local Refining Capacity
Energy experts have offered a more nuanced perspective, warning against hastily reopening imports that could undermine Nigeria's progress in local refining. Kelvin Emmanuel, Principal Partner at The Energy Consulting Practice, described the World Bank's position as flawed, noting that importers cannot land high-specification petrol below N1,750 per litre under current conditions due to operational costs and quality standards under the PIA.
Emmanuel linked the bank's recommendation to global frustrations over Nigeria's reduced imports of substandard fuels, which have declined by about 90 percent due to new refining capacity. He emphasized that in a truly deregulated market, prices would fluctuate with international crude prices and exchange rates, while highlighting cost pressures on local refiners from geopolitical tensions and lack of structured domestic crude supply.
Professor Emeritus Wumi Iledare of Petroleum Economics struck a balanced note, suggesting that in the short term, increased imports could stabilize supply and ease price spikes amid rising global energy costs. However, he warned against jeopardizing Nigeria's transition from a fuel importer to a self-sufficient producer and potential exporter, noting the country's historic refining advancements.
Navigating the Path Forward: Balancing Consumer Relief and Energy Independence
The debate underscores a critical tension between providing immediate relief to consumers through lower prices and achieving long-term energy independence through domestic refining. Marketers push for unrestricted competition, while experts urge the government to enhance transparency in refining costs, protect local capacity, and mitigate exposure to external shocks.
As households continue to face high fuel costs, the Federal Government must decide whether to reopen imports for quicker price relief or maintain focus on building a resilient domestic refining industry. The coming weeks will reveal the chosen path, with implications for Nigeria's economic stability and energy security.
In related developments, Lagos recently recorded the arrival of five vessels carrying petrol and diesel, delivering a combined 95,000 metric tonnes to Apapa and Tincan Island ports between March 27 and March 29, 2026, offering a temporary boost to fuel supply stability amid ongoing concerns.
