Oil marketers have warned that the Dangote Petroleum Refinery and other refineries in Nigeria may increase the price of petrol to N1,500 per litre if a complete ban on fuel importation is enforced.

Chinedu Udadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, supported this claim, while the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) stated that while it couldn't predict specific prices, a price hike would be inevitable if the Federal Government halts fuel imports.

However, officials from the Dangote refinery rejected the projection, suggesting that the marketers' statements were aimed at justifying their continued importation of "substandard" fuel.

The comments come amid growing concerns that President Bola Tinubu may implement a fuel importation ban as part of his ‘Nigeria First Policy’, which directs government agencies to cease importing products that can be locally produced.

With the 650,000 barrels per day Dangote refinery and other modular refineries coming on stream, there are speculations that the Federal Government might end fuel importation, which is now about 14.7 million litres per day.

Also, the fact that the Dangote refinery dragged the Nigerian Midstream and Downstream Petroleum Regulatory Authority to court, alongside other players in the industry, is a source of concern to importers, depot owners, and marketers.

As a result, the stakeholders voiced out, saying the Dangote refinery does not have the capacity to meet local demand. But Dangote refuted the claim, saying it has enough to satisfy local consumption and export to other countries.

Speaking in an interview with our correspondent, Ukadike argued that importation is necessary to check the local refiners and prevent profiteering. The IPMAN spokesperson argued that even the modular refineries producing diesel still sell at prices higher than the prices offered by the importers.

According to Ukadike, the rumour that Tinubu may ban fuel imports was not welcomed by IPMAN, asking the President not to consider such a move.

He noted that importers were the only hope of the nation at a time when there were no functioning refineries in the country, saying it was pertinent to allow them to continue their businesses to check domestic fuel prices.

Ukadike warned that refiners might resort to extortion if there are no alternatives from other sources.

“Importation has been long there, and it has been sustaining us. Now that we have the Dangote refinery that has been producing petroleum products and the NNPC that has been struggling to see whether they can produce one keg of petrol for this country, it is also pertinent to allow importation to check the domestic prices of fuel in this country.

“We won’t want refiners to start extorting Nigerians because there are no more imports. Sometimes, import helps to regulate the prices of petroleum products. You will also agree with me that the modular refineries producing diesel are not selling it cheaper than the imported one. I will appeal to Mr President to allow the importation of petroleum products,” he explained.

Ukadike said fuel importers will stop importing once they notice that the local price is lower than the cost of imported fuel.

"The issue is the price factor that will determine whether importation continues," he said. "If local fuel prices are affordable, marketers will buy locally, and importers will naturally stop importing. Let the market determine the prices, but once you ban imports, Dangote will increase the petrol price to N1,500, which is not beneficial for Nigerians."

Instead of imposing a ban, Ukadike urged the government to provide support to local refineries through financing, tax incentives, reduced interest rates, and other measures that could help make them exporters of petroleum products.

"As independent marketers, we do not support the banning of fuel imports. The government should assist local refineries and manufacturers by addressing taxes, bank charges, and ensuring their prices are competitive for export, not just for domestic consumption. The government can mandate local refineries to export products once domestic needs are met," he emphasized.

PETROAN’s Perspective

Billy Gillis-Harry, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), concurred with IPMAN, stating that without fuel imports, petrol prices could rise, and described the current price reductions by local refineries as unsustainable.

While PETROAN refrained from speculating on exact prices, Gillis-Harry cautioned against allowing the country to rely on a single source for its energy needs.

He also pointed out that banning fuel imports would go against the Petroleum Industry Act, which was designed to create an open market for all industry players.

“There will be price surges if fuel importation is banned. Even these price reductions, as far as we are concerned, are artificial. And if there are no empirical values to give us any clear-cut financial engineering that will give us the prices we see in the market, it means something is wrong and something will be wrong in the future, too.

“So, the authorities need to do quite a lot. The Federal Competition and Consumer Protection Commission should also do quite a lot to check everything and make sure that the industry is stable,” he said.

When reminded that the Dangote refinery had claimed it could supply fuel nationwide and export to other countries, Gillis-Harry responded, “I’m a businessman. If you ask me about my capacity, I won’t downplay it. But the proof is always in the results."

"We halted imports for six months starting in November. What happened? Now, we have a situation where prices are adjusted at will—up one day, down the next. That’s not sustainable. Our daily fuel consumption is around 46 to 48 million litres. Where is the local capacity to consistently meet that demand? Even if someone can hit full production today, how long can they maintain it?”

He continued, "Everyone should play their part—refiners should refine, storage facilities should maintain quality service, and logistics players like NARTO, NUPENG, and PTD should ensure smooth distribution. This way, the entire value chain remains active, benefitting Nigerians and strengthening the economy through tax revenues."

When asked about his reaction if the court supports Dangote’s request to halt fuel imports, Gillis-Harry stated, "The court will rule based on the law. Our country is governed by laws, and any judgment should align with the constitution. The fact that this issue is in court suggests a problem. Why should one company control the entire market? Everyone has a right to do business if qualified."

He further questioned, "Licenses for this business are costly. So why should someone with a valid license be told to stop? It doesn’t make sense."

Dangote Responds

On the other hand, the Dangote refinery dismissed claims that it would hike petrol prices to ₦1,500 per litre if imports were banned, arguing that marketers were pushing this narrative to continue importing low-quality fuel.

A top official from the refinery, speaking anonymously due to lack of authorization, stated, "This is simply the marketers' wish. They want to keep bringing in substandard, dirty fuel. There’s no logic in suggesting that prices would suddenly jump from ₦890 to ₦1,500."

Another official emphasized, "The refinery was built to improve life for Nigerians, not to exploit them. We are capable of meeting local demand and exporting to other countries."

He explained that prices are determined by crude oil cost and the exchange rate, not by mere speculations.

Earlier, the Crude Oil Refiners Association of Nigeria said the naira-for-crude deal will prompt a reduction in fuel prices.

CORAN spokesperson, Eche Idoko, said with the naira-for-crude deal and the crash in crude prices, petrol prices could drop below N700 per litre or N350 if crude crashes to $50 per barrel.

Meanwhile, the Director of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, disagreed with claims that the recently approved procurement policy could enable a monopoly over petroleum products importers, particularly from the Dangote refinery.

He argued that any fear of a monopoly may arise from downstream sector players categorising the Nigerian National Petroleum Company Limited as one of the government Ministries, Departments, and Agencies with procurement powers.

Yusuf queried, “What has the importation of oil got to do with government procurement? Well, maybe the NNPC people are seeing themselves as one of the government MDAs.”

He urged players in the downstream sector to allay their fears by working to set up extra refineries while maximising the four NNPC-operated refineries, especially those in Warri and Port Harcourt.

“If they want to compete with the Dangote refinery, they should go and set up their own refinery. What the government is saying is that whatever we are producing, if it is sufficient, don’t go and import it. So, if they don’t want a monopoly, let all the other refineries work. NNPC has four refineries. If they are not able to refine, whose fault is that?” he asked.

Yusuf further argued that the claims of a monopoly appear improbable because of the absence of a level playing field between importers of petroleum products and local refiners.

“There is no level playing field. Imported fuel and fuel that is locally produced are not the same thing. There is no fair competition because, for the person importing petroleum products, the environment is different, the cost of production is different, the regulatory environment is different, and maybe the quality itself is different. When we are talking about competition, it has to be somebody producing locally, competing with another person producing locally,” he stressed.