Nigeria Eases Fuel Import Restrictions as Supply Concerns Rise, Calls Grow for Increased Domestic Crude Allocation
Nigeria has lifted its ban on fuel imports, granting six new licences for the importation of Premium Motor Spirit (petrol), following concerns over supply disruptions amid geopolitical tensions in the Middle East. The move marks a notable shift from the Federal Government’s recent policy of reducing dependence on imported fuel in favor of domestic refining capacity.
The development comes as the Dangote Petroleum Refinery struggles with mounting foreign exchange losses under the naira-for-crude policy. A senior management official at the $20 billion Lekki-based refinery disclosed that inefficiencies in the arrangement have limited potential earnings, even as regulators aim to stabilize the domestic fuel market.
Industry stakeholders, including oil marketers and domestic refiners, have called on the Federal Government to increase crude supply to Dangote and other local refineries to prevent fuel scarcity, noting that similar shortages are being reported in other countries as a result of the Middle East crisis.
Regulatory Reversal
A recent S&P Global report, obtained on Wednesday, revealed that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) granted licences for the importation of roughly 180,000 metric tonnes of petrol. This decision comes just weeks after the regulator had insisted that domestic refining capacity was sufficient to meet the country’s fuel needs.
A senior NMDPRA official confirmed that the move was intended to address an unexpected supply gap triggered by geopolitical tensions. According to the report, “Nigeria has relaxed its gasoline import restrictions for the first time since October by issuing a round of new licenses to local marketers. The Middle East crisis created a shortfall, so import licences were issued to bridge the gap.”
George Ene-Ita, NMDPRA’s spokesperson, did not respond to requests for confirmation at the time of filing.
Further investigation revealed that the importing marketers include Bono Energy, Pinnacle, AYM Shafa, Matrix, A.A. Rano, and Nipco, each expected to import about 30,000 metric tonnes of Premium Motor Spirit. This equates to roughly 40.5 million litres per company and a total of 243 million litres.
Domestic Refining and Supply Fragility
The move highlights the fragility of Nigeria’s fuel supply, despite recent gains in domestic refining. On March 11, NMDPRA had paused the issuance of petrol import licences, citing improved local production. At the time, domestic refineries supplied about 36.5 million litres per day in February 2026, compared to only three million litres contributed by imports. Officials had argued that the country no longer needed fuel imports and that a gradual transition to self-sufficiency was feasible.
A source at NMDPRA previously told The PUNCH, “It’s correct that we’ve not issued import licences this year. It is obvious that local production has met national requirements. So, there’s no need for importation.”
However, the latest approvals indicate that supply stability remains sensitive to international disruptions. Jeremiah Olatide confirmed that NMDPRA has resumed issuing import permits, noting that the total number is relatively low, which demonstrates that local refining remains dominant. Nevertheless, he stressed that imports are necessary to stabilize the market. “Energy insecurity could collapse Nigeria’s economy, so importation is needed for a balance,” he said.
Challenges at Dangote Refinery
A senior management official at Dangote, speaking on condition of anonymity, explained that the refinery is expected to supply the same volume of crude it receives under the naira-for-crude deal back to the domestic market as refined products. Instead, the refinery now supplies more than what it receives, resulting in lost foreign exchange that could have been earned through exports.
“The naira-for-crude deal was conceived by His Excellency, the President, to supply petroleum products in naira based on the crude supplied. But we are ending up supplying more than the crude we get, thus losing forex which we would have gained if we exported the products,” the official said.
The source emphasized that the refinery’s request is not to receive crude payments in naira, but to ensure adequate feedstock supply in line with the Petroleum Industry Act, which mandates domestic crude allocation before export.
During a live programme on Arise News TV, Dangote CEO David Bird stated that the facility is currently buying Nigerian crude on the international market at a premium because it does not receive sufficient volumes domestically. Bird said the refinery currently gets only five cargoes monthly, compared to the expected 13–15 cargoes, forcing the company to source crude abroad at higher costs, including freight and insurance.
Bird clarified that the naira-for-crude policy is designed to stabilize Nigeria’s foreign exchange, not to provide financial advantages to the refinery. Despite these challenges, the refinery operates at its full installed capacity of 650,000 barrels per day, serving both domestic and regional markets.
Calls for Strategic Crude Allocation
Industry stakeholders continue to advocate for increased crude supply to domestic refineries. Crude Oil Refinery Owners Association of Nigeria (CORAN) emphasized that petrol prices are affected by international crude oil prices, exchange rate pressures, and logistics costs. Eche Idoko, CORAN’s spokesperson, stressed that domestic refining alone is insufficient to lower prices unless these factors are addressed.
“More crude allocation to Dangote and other modular refineries will help, but it must be implemented strategically. Refineries must get priority access to crude before export, as required by law,” Idoko said. He also recommended fair domestic pricing for crude, reduced exposure to foreign exchange, and support for modular refineries to encourage competition and improve supply stability.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) echoed similar concerns, urging the government to implement temporary interventions to cushion the effect of rising fuel prices. According to Joseph Obele, PETROAN spokesperson, the steady increase in petrol prices has placed “significant financial pressure on citizens, businesses, and the broader economy.”
National President Billy Gillis-Harry noted the ripple effects on transportation costs, goods and services, and the overall cost of living. The association recommended measures such as enhanced crude supply to domestic refineries, transportation relief, temporary food subsidies, and promotion of alternative fuels like compressed natural gas and liquefied petroleum gas.
Balancing Local Refining and Imports
The resumption of import licences underscores the need to balance local refining capacity with strategic imports to ensure fuel security. Analysts and industry players agree that adequate crude allocation, effective implementation of the naira-for-crude policy, and long-term planning—including building national reserves—are essential for maintaining stable supply chains and controlling domestic fuel prices amid global volatility.
“The country must not just refine locally; it must strategically allocate and price crude to ensure energy security. That is the sustainable way to bring down pump prices,” Idoko concluded.
As Nigeria navigates these challenges, the government, regulators, and industry stakeholders face a delicate task: ensuring fuel availability, stabilizing prices, supporting local refining, and mitigating the impact of international market disruptions on the domestic economy.