Domestic refining should be the foundation of Nigeria’s fuel supply —Prof Iledare

Renowned Professor of Petroleum Economics, Wumi Iledare, has said domestic refining should serve as the foundation of Nigeria’s fuel supply. This approach, according to him, will enhance energy security, reduce vulnerability to foreign exchange fluctuations, and retain more economic value within the country.

His argument becomes relevant in light of rising petrol imports in Nigeria during June and July 2026, as highlighted by the NMDPRA’s factsheet.

Professor Iledare noted that the increase in petrol imports, despite significant domestic refining capacity, presents a considerable challenge in the downstream market. He pointed out a nine percent rise in imports, reaching 19.7 million litres per day in July, alongside a decrease in domestic consumption. This situation raises questions about market efficiency, competitiveness, and Nigeria’s progress in shifting from import reliance to domestic refining.

“Domestic refining should become the foundation of Nigeria’s fuel supply, improving energy security, reducing exposure to foreign exchange pressures, and retaining more value within the economy,” he stated. However, he emphasized that domestic production should not be insulated from competition or guaranteed market access, regardless of cost, quality, or reliability.

Iledare acknowledged that imports remain essential when they provide better value, fill supply gaps, or serve as a credible alternative to domestic suppliers.

He commented on Dangote Refinery’s option to export excess petrol, noting that persistent imports could lead to demand uncertainty, inventory risks, and challenges in production planning.

He elaborated that exporting locally refined petrol while continuing to import it illustrates a coordination problem in the market. He warned that if domestic refineries cannot…