NMDPRA’s Fresh Import Licences Will Encourage Dumping of Low-Quality Petrol, Undermine Local Refineries — Energy Transparency Group

The decision by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to resume the issuance of petrol import licences has drawn sharp criticism from industry advocates, who warn that the move risks undermining domestic refining efforts and exposing the market to substandard fuel products.

In a statement issued on Wednesday, the Energy Transparency and Market Justice Initiative (ETMJI) condemned the regulator’s action, describing it as a policy reversal that could weaken recent gains in local supply while encouraging the inflow of lower-quality petroleum products.

The regulator had earlier maintained that domestic refining capacity was sufficient to meet national demand, suspending the issuance of import licences in February. However, following supply disruptions linked to the Middle East crisis, the agency granted fresh licences to six marketers to import about 180,000 metric tonnes of petrol in a bid to stabilise supply.

While the NMDPRA has framed the move as a temporary intervention, ETMJI said the decision reflects deeper inconsistencies in regulatory direction and raises concerns about quality control in Nigeria’s downstream sector.

Dr Salako Kareem, who signed the statement, said the reintroduction of petrol imports under emergency conditions risks opening the floodgates to products that may not meet required specifications.

“What we are witnessing is a deeply flawed response to a complex problem. Attempting to resolve supply shortages by reintroducing large-scale fuel imports, without watertight quality assurance, is comparable to using poison to cure a disease. It may appear to offer immediate relief, but in reality, it introduces far more dangerous consequences for consumers, the market, and the integrity of the regulatory system,” he said.

Kareem argued that rather than reverting to import dependence, the regulator should have prioritised strengthening domestic supply chains and addressing distribution inefficiencies that often create artificial scarcity.

According to him, the decision sends conflicting signals to investors in local refining, particularly at a time when Nigeria is seeking to reduce its reliance on imported petroleum products.

“This policy direction undermines the confidence of investors who have committed resources to building domestic refining capacity. When the regulator oscillates between import substitution and import expansion without a clear framework, it creates uncertainty that discourages long-term investment and planning in the sector. You cannot, on one hand, advocate self-sufficiency and, on the other, reopen the gates to imports at the slightest disruption,” Kareem said.

The group also raised concerns about the potential economic implications of renewed import activity, noting that increased reliance on imports could exert pressure on foreign exchange and contribute to higher landing costs, which are often passed on to consumers.

ETMJI insisted that external shocks should not justify what it described as a “regulatory backslide” in Nigeria’s fuel supply strategy.

Kareem said the focus should instead be on building resilience within the domestic market by improving logistics, enforcing quality standards and supporting local refiners to operate at optimal capacity.

“Short-term fixes that rely on imports may offer temporary relief, but they do not address the structural weaknesses in Nigeria’s petroleum supply chain. What is required is a disciplined commitment to strengthening local production, enhancing regulatory oversight and ensuring that every litre of fuel consumed in this country meets strict quality benchmarks,” Kareem declared.

He further warned that the reintroduction of imports without stringent monitoring mechanisms could revive long-standing issues of product adulteration and regulatory arbitrage, where market players exploit loopholes for profit.

The advocacy group called on the NMDPRA to provide full transparency on the criteria used in issuing the new licences, including safeguards put in place to prevent the entry of substandard products into the Nigerian market.

It also urged the federal government to align regulatory actions with its broader energy transition and economic diversification goals, stressing that inconsistent policies could erode public trust and delay progress in the sector.

As Nigeria continues to navigate a complex energy landscape shaped by both domestic constraints and global uncertainties, stakeholders say the balance between ensuring supply and maintaining standards will remain a critical test of regulatory credibility.