Marketers have warned that Nigeria is not yet ready to ban fuel importation due to its insufficient refining capacity.

Speaking under the banners of the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), they cautioned that such a move could lead to fuel shortages and a sharp increase in pump prices.

Sources suggest that under President Bola Tinubu’s ’Nigeria First Policy’, the President directed on Monday that “no procurement of foreign goods or services already available locally shall proceed without justification and a written waiver from the Bureau of Public Procurement.”

Following claims of improved refining capacity in the country and comments by Dangote Refinery founder, Aliko Dangote, that the refinery is capable of meeting Nigeria’s fuel needs, there is growing speculation that the government may consider extending the import ban to include petroleum products.

However, the National Vice President of IPMAN, Hammed Fashola, told our correspondent that the Federal Government should not consider implementing a fuel import ban at this stage.

“I don’t think the government should be thinking in the direction of banning the importation of petroleum products. If they are thinking in that direction, we would like to advise them that this is not the right time to do that because some of the refineries are still under construction. It’s the only Dangote refinery that we can boast of for now in Nigeria.

“The important thing is that the government has to be sure of fuel security in the country. Before we can ban fuel imports, we must make sure that we have more refineries around that can take care of our daily consumption. With what is on the ground, I don’t think the government would like to do that,” Fashola stated.
He explained that certain essential products, particularly those with limited local production, should be excluded from the import ban policy due to their importance in daily life. Fashola emphasized the need for the government to maintain the current level of fuel security being experienced in the country.

“We need to sustain what we are enjoying now in the oil and gas sector. Affordability and affordability is very key,” he stated.

When reminded that the Dangote Refinery has claimed it can meet local demand, and with the Nigerian National Petroleum Company Limited and other modular refineries also in operation, Fashola stated that the true capacity of these refineries must first be tested.

“We must put all these to the test, and not just speculate. In my own candid opinion, I think that by the time we have like two or three refineries with reasonable capacity, we can be sure of banning fuel imports. Don’t forget that Dangote has its own commitment outside this country. It has its customers; it has a commitment that it has to meet.

“So, all those things have to be considered before we say we are good to go, locally. I don’t know much about the refining capacity of NNPC refineries for now, but all we know is that they are working and they are pushing to the market. But with what is on the ground, we have to be sure that we have enough locally before we make a move to ban the importation of petroleum products totally,” he explained.

Asked what the consequence could be should the government ban fuel imports now, Fashola replied, “I foresee price increase, and if care is not taken, maybe scarcity. We should not rule out the intervention of these imported petroleum products, too. Surely, there will be market reactions if you stop imports suddenly because the imported fuels are taking care of a certain quantity of our demands and our daily needs. So, it should not be suddenly done.”

Similarly, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) also cautioned the Federal Government against banning fuel importation into the country.

PETROAN warned that such a ban could result in fuel shortages or profiteering, citing the still limited refining capacity in the nation.

PETROAN’s National President, Billy Gillis-Harry, expressed a cautious welcome to President Tinubu's decision to ban the importation of goods that are produced locally.

However, he emphasized the importance of a careful approach to ensure the policy does not lead to unintended negative outcomes. The association urged the government to ensure that the policy does not lead to shortages or price increases, “particularly in the petroleum sector, where local refining capacity is still being developed.”

PETROAN voiced concerns that the policy could worsen inflation in Nigeria, highlighting the importance of ensuring energy security.

“Our primary concern is the availability and affordability of petroleum products in Nigeria to meet the daily consumption volume of over 46 million litres of petrol and other petroleum products. We must ensure that our policies do not compromise energy security, as this could have far-reaching consequences for the economy and the well-being of Nigerians,” Gillis-Harry said.

The association advocated for increased investment in local refining infrastructure and greater support for domestic industries to enhance their competitiveness. The President of PETROAN applauded President Bola Tinubu for the bold step, warning, however, of potential pitfalls.

Gillis-Harry urged the government to be cautious with the import policy to avoid causing economic disruptions.

While acknowledging the government's efforts to strengthen the domestic economy and encourage local content, the PETROAN president emphasized the need for thoughtful consideration to prevent unintended consequences.

He suggested that essential items like petroleum products, pharmaceuticals, and other vital goods should either be exempt from the ban or given special waivers to ensure they remain available.

“This is because some products may not be readily available locally, or their local production may be insufficient to meet demand, leading to shortages and price hikes. Other factors that may necessitate importing goods include unavailability of specialised technology or expertise locally, higher quality standards of imported goods, economies of scale favouring imports, strategic or critical nature of the product,” he highlighted.

Drawing on examples from other countries, the PETROAN president highlighted that even the United States, under its ‘America First’ policy, has opted for targeted tariffs rather than broad import bans, allowing for flexibility and exemptions for essential goods.

He outlined the potential benefits of banning fuel and other foreign goods imports, noting that promoting local content could boost economic growth, create jobs, and increase domestic production.

Additionally, it would reduce reliance on foreign goods, helping to narrow the trade deficit and conserve foreign exchange.