Federal Government Suspends Petrol Imports to Protect Local Refiners

The Federal Government has suspended the issuance of petrol import licences for a second consecutive month, signalling a hard pivot toward domestic self-sufficiency. This move, enforced by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), marks the first significant application of the Petroleum Industry Act (PIA) provisions that restrict imports unless local supply fails to meet national demand. No licences were issued in February, and the Crude Oil Refiners Association of Nigeria (CORAN) has confirmed that none have been granted for March.

This regulatory shift is a major victory for the Dangote Petroleum Refinery and smaller modular players. Last year, local refiners initiated legal action against the NMDPRA and the NNPCL to halt imports, arguing that continued foreign sourcing undermined domestic margins and national energy security. The regulator’s new stance effectively grants local refineries a monopoly on the market, provided they can sustain the necessary volumes to keep the country moving.

The decision rests on a cooling of domestic demand and a steadying of local output. In February, Nigeria’s average daily petrol consumption fell to 56.9 million litres, down from 60.2 million in January. During the same period, the Dangote Refinery alone supplied 36.5 million litres of petrol and 8 million litres of diesel daily. The NMDPRA deemed these volumes sufficient to cover the shortfall, negating the “emergency” requirement for imported fuel.

Read Also: Daily Petrol Use Drops to 56.9m Litres as Supply Tightens

The suspension of imports comes at a time of extreme price volatility. Local pump prices have surged by more than 54 per cent since the outbreak of the Israel-Iran war on February 28. NMDPRA spokesperson George Ene-Ita attributed this spike to the escalating conflict in the Middle East, which has driven global crude benchmarks higher. While domestic refining removes shipping and landing costs, local prices remain tethered to these international benchmarks, as refiners still pay market rates for crude.

CORAN has welcomed the regulator’s decision, though industry experts warn that the move carries risks. Critics of the import ban argue that competition is necessary to prevent market dominance and ensure price fairness. If local production falters due to technical hitches or crude supply issues, the lack of an import buffer could lead to rapid shortages. CORAN spokesperson Eche Idoko acknowledged the challenge, stating that the focus must now shift to “sustaining the momentum” of local production.

For the Nigerian consumer, the end of petrol imports is a milestone with mixed results. While it strengthens the naira by reducing the demand for foreign exchange, it has not yet delivered the expected “cheap” fuel. As long as the Middle East remains in a state of war, the benefits of local refining will be measured in supply security rather than lower pump prices. The Federal Government is betting that the long-term stability of a domestic-led market outweighs the immediate pressures of a global energy crisis.