Several experts in the oil and gas sector have argued that Nigeria is not yet prepared to halt the importation of refined petroleum products.
According to The PUNCH, they urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority to resist any external pressure.
This stance emerged following allegations by the NMDPRA Chief Executive, Farouk Ahmed, who claimed that the Dangote refinery pressured him to stop issuing fuel import licences.
Ahmed maintained that he rejected the request to prevent a monopoly and ensure energy security for the country.
These comments have angered many Nigerians, leading to calls for Ahmed’s removal.
In a conversation, energy consultatnt, Henry Adigun criticized the NMDPRA for publicly discussing the Dangote refinery.
While he acknowledged the truth in Ahmed’s statements, Adigun believed they should not have been disclosed to the media.
Adigun asserted that Nigeria should only cease fuel importation once it has at least three to four operational refineries.
“We cannot stop the importation of fuel now until we have about three to four functioning refineries. We cannot have our energy security in the hands of one person, that’s what the NMDPRA chief executive was trying to say, but it shouldn’t have been a discussion for the press,” Adigun stated.
He further suggested that the government should consider the impact on other midstream investors who might be affected by a sudden halt in importation.
Adigun pointed out that depot owners are protected by the Petroleum Industry Act (PIA) to import fuel, a right that cannot be arbitrarily revoked.
According to Adigun, fuel importers would naturally source from the Dangote refinery if it offered better prices than international suppliers.
Contrary to some beliefs, Adigun argued that the Dangote refinery would not significantly reduce the pump price. He explained that crude oil costs, whether sourced locally or in naira, would still be based on international benchmarks.
Adigun noted that the current landing cost of petrol is around N1,100, influenced by production costs.
He suggested that a fixed-price agreement between the Nigerian National Petroleum Company Limited and Dangote could potentially alter this scenario, provided it bypasses international benchmarks and fluctuating exchange rates.
Another industry expert, Dr. Taiwo Ogunleye, emphasized the enduring significance of petroleum in the global energy mix and economy.
Ogunleye highlighted that Section 317(8) of the PIA mandates the NMDPRA to promote investment in local refining through a backward integration policy.
Ogunleye added that Section 317(9) of the PIA empowers the regulator to allocate import licences to firms with active local refining licences or proven international trading records to cover product shortfalls. These regulatory powers, he insisted, should not be compromised.
Ogunleye also noted that import volume allocation should follow criteria set by the NMDPRA, based on refining output, wholesale customer share, competitive pricing, and prudent supply and distribution records, as per Section 317(10) of the PIA.
He stressed that imported products must meet the Afri-5 Specification (50 ppm sulfur) as mandated by the ECOWAS declaration.
However, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, advocated for an early cessation of fuel importation.
Idoko argued that local refiners could meet domestic fuel demands if the government provided crude to local refineries in the local currency, as promised.
