Amid NNPC-Dangote Refinery Price War, Stakeholders Disagree Over Fuel Importation
- The ongoing price war between NNPC and Dangote Refinery has seen fuel pump prices drop more than N100 in six weeks
- Despite this, the recent NBS report showed that Nigeria still spends trillions of naira on fuel importation
- Stakeholders are at loggerheads over the continued fuel importation and what it means for the industry
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Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
Amid the ongoing price war between the Nigerian National Petroleum Corporation (NNPC) Limited and the Dangote Petroleum Refinery, stakeholders have expressed differing opinions over what the continued fuel importation means for the industry.
There are calls for the government to step in and protect domestic refineries by restricting or stopping fuel imports altogether.
Source: Getty Images
Recall that the National Bureau of Statistics (NBS) released a report last week showing that petrol imports were growing year-on-year despite the domestic refining, and rehabilitation of several state-owned refineries.
Fuel imports jumped from N7.51 trillion recorded in 2023 to N15.42 trillion in 2024, marking a 105% spike.
The case to end fuel importation
The Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, has opined that the wise thing to do was to stop the importation of anything that could be produced locally.
Yusuf pointed out that such a step will not only protect local industries but also improve Nigeria’s dwindling foreign exchange reserves and help the country achieve economic independence, The Nation reports.
With fuel importation stopped the pressure on the naira in the foreign exchange market will reduce significantly, promoting liquidity and giving the naira room to recover in the FX market.
Dr. Yusuf noted that with the two NNPC refineries in Warri and Port Harcourt, the Dangote Refinery being the biggest in Africa, and other smaller refineries operating in the country, Nigeria is poised for self-sufficiency.
He questioned the decision of the government to continue issuing petroleum importation licenses in this situation.
Oil marketers want importation to continue
In a counterargument, oil marketers insisted that fuel importation should continue for several reasons.
Despite all the information suggesting that the Dangote Refinery alone could meet local demand for petroleum products, the marketers insisted that imports must continue to avoid scarcity and long queues in the filling stations.
They also highlighted challenges like supply chain inefficiencies that could prevent domestic refineries from meeting local demands.
The Executive Secretary, Major Energies Marketers Association of Nigeria (MEMAN), Clement Isong, insisted that continued imports will keep prices competitive so that Nigerians continue to enjoy the lowest prices and best quality.
Source: Getty Images
Dr. Yusuf, however, insisted that competition could be kept alive in the industry by encouraging more investors to go into petroleum refining and increasing the number of players.
He observed that governments in other countries used import tariffs to encourage local production and discourage imports so that the local industries could create more jobs, improve economic independence and enhance the macro indicators for the country.
Dangote reduces fuel prices again
Recall that the landing cost of a litre of imported petrol was said to have recently dropped to N744.72, below the prices of the local refineries.
In response to that information, Dangote Petroleum Refinery did a second price cut by N10, within two weeks of the last price cut.
This cut brought fuel price down to N815/litre from N825 after the first price slash brought it down to N825 from N890.
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Proofreading by Nkem Ikeke, copy editor at Legit.ng.
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Ruth Okwumbu (Business Editor) Ruth Okwumbu-Imafidon is a business journalist with over a decade's experience. She holds both a Masters' and B.Sc. degrees Mass Communication from the University of Nigeria, Nsukka, and Delta State University. Before joining Legit.ng, she has worked in reputable media including Nairametrics. She can be reached via ruth.okwumbu@corps.legit.ng
Nkem Ikeke (Copy editor) Nkem Ikeke is currently a copy editor who also writes for the politics and current affairs desk on weekends. She holds a Bachelor of Arts in Mass Communication degree from the University of Nigeria, Nsukka (2010), and has over 10 years of work experience in the media industry (Reporter, News Agency of Nigeria). Email: n.ikeke@corp.legit.ng
