Nigeria has suspended fuel import licenses to support local refineries like Dangote Refinery

Amidst the US and Israeli strikes on Iran, fuel pump prizes have surged more than 54 percent and it has pushed global oil markets higher. And recently, Nigeria has suspended the issuance of petrol import licenses for a second consecutive month, as regulators move to enforce rules that restrict imports when domestic supply is sufficient. Data obtained from Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) shows that no licenses were granted in February and Crude Oil Refineries Association of Nigeria has also confirmed that none has been issued in March.

Before now, the Petroleum Industry Act (PIA) permitted import licenses only when local production fell short of national demand. And currently, domestic output has met that threshold and it has effectively barred importers from bringing in foreign fuel.

Luckily for Dangote Refinery, this development makes a big win for them. In February alone, Dangote supplied 36.5 million litres of petrol and 8 million litres of diesel to the Nigerian market and this volume, according to regulators, is sufficient to justify withholding import permits. However, some argue that licenses are necessary regardless, because it helps to maintain market competition and prevent dominance or monopoly by a single player.