Local Refiners and Marketers at Odds Over Fuel Imports

Local refinery operators, represented by the Crude Oil Refineries Association of Nigeria (CORAN), have challenged fuel importers, clashing with marketers over the continued importation of refined petroleum products.

CORAN called on the Federal Government to prioritise domestic refining and restrict imports, while retailers under the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) argued that importation should remain open throughout 2026 to ensure sufficient supply.

CORAN stated that imports should serve only as a balancing mechanism, but PETROAN maintained that willing traders should be allowed to import fuel to prevent shortages.

In a position paper titled “True Faith in Nigeria’s Downstream: Why Local Refinery Companies Built While Importers Traded”, CORAN highlighted that true commitment to the sector is measured by long-term investment and risk exposure, not trading activity. The association said local refinery companies have shown faith in Nigeria by investing in fixed industrial assets within the country.

“Refining is one of the most capital-intensive and risk-exposed segments of the petroleum value chain. Investors contend with construction risks, crude supply uncertainties, foreign exchange volatility, power, logistics, evacuation constraints, and policy inconsistencies,” CORAN said. “Once a refinery is built, capital is effectively locked in. It cannot be relocated or exited without substantial loss. This is not a trading strategy—it is an industrial declaration of confidence in Nigeria’s future.”

The association noted that local refiners have collectively committed tens of billions of dollars to downstream infrastructure, which only delivers value if Nigeria succeeds as a refining and industrial economy. By contrast, Nigeria’s downstream sector has historically been dominated by an import-driven model, particularly during the subsidy era, which yielded substantial profits but failed to develop local refining capacity.

CORAN cited official data showing that Nigeria remains heavily reliant on fuel imports. According to the National Bureau of Statistics, over 20 billion litres of Premium Motor Spirit were imported in 2023. The association also noted a sharp rise in import bills, with petrol imports reaching approximately ₦15.4 trillion in 2024, more than double the ₦7.5 trillion recorded in 2023. These outflows, CORAN said, could have circulated within the domestic economy through refining, logistics, storage, petrochemicals, and industrial employment.

“Importation consumed national wealth but did not build national capacity,” the association said. It added that capital generated from import trading largely flowed into real estate, financial portfolios, and upstream acquisitions, often with crude subsequently exported rather than refined locally.

CORAN described the situation as a clash between two competing downstream philosophies: one focused on domestic value addition, energy security, and long-term economic resilience, and the other reliant on continued import access, FX windows, and permissive import regimes. The association called on the Federal Government to guarantee crude supply to domestic refineries, regulate imports where local capacity exists, and establish rule-based, enforceable allocation mechanisms.

CORAN urged conditional import licensing, fair pricing, and equitable foreign exchange treatment for refiners, stressing that importation should be a balancing tool rather than a default option. “This is not about favouring one company over another; it is about deciding the kind of downstream sector Nigeria wants,” the association said.

The statement comes amid calls from Dangote Petroleum Refinery for the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to halt fuel import licences. Aliko Dangote accused the former NMDPRA chief of issuing ‘reckless’ licences in November despite full refinery tanks.

Reacting to these calls, PETROAN spokesman Joseph Obele said no single source can supply the nation alone. He reaffirmed that the import window should remain open throughout 2026 and warned that restricting imports could lead to fuel scarcity.