EBC Financial Group calls for clear fuel import rules amid market uncertainty

Nigeria’s ongoing petrol-import dispute has emerged as a major test of fuel price stability, supply security and investor confidence as the country accelerates its transition toward large-scale local refining.

Global brokerage and asset management firm EBC Financial Group said the battle over fuel import licences has become increasingly significant as the Dangote Petroleum Refinery ramps up domestic production while fuel marketers continue pushing for import approvals to remain available as a backup supply channel.
Dangote Refinery has reportedly filed a fresh lawsuit challenging import licences granted to fuel marketers and the Nigerian National Petroleum Company Limited, also known as NNPC Limited. Marketers, however, argue that imports remain necessary to preserve supply security, maintain market competition and prevent shortages across the country.

According to EBC, the central challenge for Nigeria is whether it can rapidly reduce petrol imports while sustaining stable fuel reserves, reliable depot operations, efficient trucking distribution, manageable pump prices, reduced foreign exchange demand and strong investor confidence.

The company noted that Dangote Refinery has already altered Nigeria’s petrol supply structure by introducing large-scale domestic refining capacity into a downstream market that previously depended heavily on imported refined petroleum products.

With a nameplate refining capacity of 650,000 barrels per day, the refinery represents Nigeria’s largest local fuel-production facility and is expected to reduce dependence on imported cargoes, lower shipping exposure and cut demand for foreign exchange used in fuel imports.

The impact of local refining is already visible in Nigeria’s Premium Motor Spirit (PMS) import figures. Between January and April 2026, PMS import volumes reportedly declined from about 25 million litres per day to 3.7 million litres daily as domestic refining output expanded.

However, EBC warned that the decline in imports has also coincided with a reduction in PMS stock cover, which reportedly dropped from 21.2 days in March to 17.7 days in April.

The company explained that while lower imports indicate progress toward local fuel supply, weaker stock cover also means Nigeria now has fewer days of stored petrol available should refinery operations, depot loading or trucking systems encounter disruptions.

Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reportedly showed that Dangote Refinery produced 53.6 million litres of PMS per day in April 2026, while domestic supply from the refinery stood at 40.7 million litres daily and imports declined to 3.7 million litres.

Despite the increase in production, EBC stressed that refinery output alone does not automatically translate into nationwide fuel availability.

The company explained that petrol must still move through several stages before reaching consumers, including depot processing, truck loading, transportation and retail distribution through filling stations.

According to the report, delays in refinery loading, depot release, truck allocation or station replenishment could increase waiting times, raise transportation costs, widen regional price differences and tie down more working capital for marketers.

EBC also noted that import licences remain commercially important because imported cargoes can help replenish depots whenever local refinery supply or fuel transportation falls short of market demand.

The report added that when local fuel supply moves efficiently across the country, excessive imports could weaken demand certainty for domestic refiners. However, when stock cover tightens or regional supply lags behind consumption, imports may help rebuild reserves and stabilise replenishment cycles.

The company said one of the major policy concerns remains the absence of clear operational guidelines defining how shortages are measured, what data qualifies as evidence of supply gaps and when import licences should be activated.

Commenting on the issue, Senior Market Analyst at EBC Financial Group, David Precious, said the debate has shifted beyond refinery construction to broader questions of market reliability and supply-chain efficiency.

“Nigeria’s downstream fuel debate is moving from a question of refinery capacity to a question of market reliability. Local refining is a major structural gain, but the market still needs clear rules on when imports are allowed, how supply shortfalls are measured, and how fuel can move consistently from refinery gate to final consumer,” he said.

The report further stated that the dispute carries broader economic implications because petrol prices directly affect transportation fares, food distribution, generator costs, retail delivery services and small-business operations.

EBC explained that although local refining may reduce import dependence, it does not automatically guarantee lower fuel prices because several other market variables still influence pump prices.

These include crude oil prices, foreign exchange costs, refinery-gate pricing, depot margins, loading expenses, trucking costs and competition between refiners, importers and marketers.

The company referenced reports indicating that Dangote Refinery’s ex-depot PMS price recently stood at about N1,350 per litre, while the latest National Bureau of Statistics data placed the average retail petrol price at N1,288.54 per litre.

According to EBC, higher depot or wholesale prices could eventually increase transport fares, ride-hailing costs, food distribution expenses, generator operating costs and general business operating expenses nationwide.
Fuel pricing also remains closely tied to inflation trends.

The report noted that Nigeria’s headline Consumer Price Index inflation rate rose from 15.38 per cent in March 2026 to 15.69 per cent in April 2026, according to figures from the National Bureau of Statistics.

EBC warned that unstable fuel supply or higher depot prices could worsen inflationary pressure on businesses and households already facing rising operational and living costs.

The company also stated that local refining may reduce one source of demand for US dollars because fewer imported fuel cargoes may be required. However, it cautioned that the full foreign exchange benefit would depend on factors such as crude oil sourcing, crude pricing systems, shipping costs, refinery output and export activity.

Meanwhile, Nigeria’s recent sovereign credit-rating upgrade by S&P Global Ratings has further increased investor attention on the country’s fuel-market reforms.

S&P recently upgraded Nigeria’s long-term sovereign credit rating from B- to B, citing stronger macroeconomic conditions, improved oil production, exchange-rate liberalisation and expanding domestic refining capacity.

EBC said the petrol import dispute has therefore become more important to investors evaluating Nigeria’s economic reform programme and policy direction.

“The risk for Nigeria is not simply whether petrol is imported or refined locally. The bigger issue is whether the transition can keep pump prices, fuel reserves and investor confidence stable at the same time,” Precious added.

The company concluded that Nigeria’s domestic refining expansion would ultimately be judged not by refinery size alone but by outcomes such as adequate fuel stock cover, stable pump prices, efficient nationwide distribution and credible market competition.

According to EBC, if those conditions are maintained, local refining could strengthen Nigeria’s broader economic reform agenda.

However, if supply reliability weakens, the pressure may simply shift from import terminals to refinery gates, depots, trucking operations and filling stations across the country.