Business
Refiners Hinge Price Differences on Imported Petrol on Quality
The Crude Oil Refiners Association of Nigeria has faulted claims that imported petroleum products are cheaper than locally refined fuels, arguing that price differences stem from quality disparities and not efficiency, while accusing the World Bank of failing to make a like-for-like comparison.
The association’s Publicity Secretary, Eche Idoko, who spoke in an interview with The PUNCH, said local refineries were disadvantaged by premium crude pricing and unfair benchmarking against blended imported products.
In a now-deleted report, the World Bank Group had stated that Dangote’s petrol price was higher than imported ones, asking the Federal Government to allow fuel importation. Reacting in an interview with our correspondent, Idoko maintained that the World Bank was not fair with his comparison.
According to him, petroleum products imported into Nigeria are blended and are of low quality compared to locally produced ones.
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He added that many imported fuels were blended to meet minimum regulatory specifications, making them cheaper but not directly comparable to fully refined local products.
“What is the quality, what is the process of producing some of these imported products? Some of the products that have been imported are blended products that are coming from Kazakhstan and the Far Eastern European countries. They blend just to get the parameters that they need in this country. And then they bring it in.
“In terms of quality, they would not compete with the quality that we produce from our refineries here. And of course, it also dovetails with the fact that blending is cheaper than refining. So, those are factors that would make those prices cheaper,” he stated.
Idoko said any comparison must account for product specifications such as density, flash point and pour point, noting that different fuel grades attract different prices.
“The World Bank has failed to tell us what the density was, what the flash point was, what the pour point was, and all those things about these products. They should also give a comparison because not all products are the same. There are different grades of PMS. There are different grades of diesel. And as different as they are, so also are the prices. So it’s not okay to just say the price of petrol produced in Nigeria is higher than the price of imported petrol. How do you grade the two of them?” he asked.
He insisted that unless identical grades were compared, conclusions about price competitiveness would be misleading. “When you are speaking of two different grades of fuel, then you are not being fair to the local refinery. So I think those are the factors that the World Bank will have to spell out when they are doing their comparison. It has to be apple with apple and not apple with pear or apple with orange,” he said.
The CORAN spokesman also clarified that blending was not illegal but typically produced lower-grade fuels that cost less. “Blending does not mean adulterated fuel. No, not necessarily. As I said, in products, you have grades. So the higher the grade, the higher the price.
“And then when you’re looking at the grade, you’re looking at the level of emissions. So if I’m refining and my emissions are more environmentally friendly, it will definitely be more expensive because it takes a higher level of refining. But if it’s not, then it means it’s a lower grade, so the price will be lower.
“So I’m not saying blending is bad. I think that the misinformation is that, when you blend, it’s like something illegal. No, it’s not illegal. But it doesn’t give you the grade in terms of quality as the one that has gone through the full reforming process. It won’t give what the one who went through a standard catalytic reformer and reforming process will give you. The refined one will be different from what a blended product will give you,” he stated.
Among other factors contributing to the high cost of locally produced fuel, Idoko blamed a lack of enough crude supply and the sale of the crude at a premium.
“Modular refineries are still buying crude at a premium. And the Dangote refinery, even though it’s getting crude, is getting it at a premium. There are no comparative advantages. There are no discounts. Dangote and other refineries are buying from traders internationally. Now, we don’t enjoy incentives here. And then they are quoting our price at Brent. So you cannot see any comparative advantage,” he said.
His comments followed a recent report by the World Bank, which stated that imported petrol was cheaper than locally refined fuel in Nigeria. In its Nigeria Development Update released in Abuja on Tuesday, the bank noted that the current pricing structure had created a gap between locally refined fuel and import parity prices.
It stated that imported petrol is about 12 per cent cheaper than fuel supplied by the Dangote refinery, reflecting distortions in the domestic pricing structure amid soaring global crude prices.
“The Dangote refinery—the main supplier of refined petrol after the regulator ceased issuing import licences in early 2026— raised the ex-depot price of Premium Motor Spirit to about N1,275 per litre as of March 23, 2026, compared to an estimated import-parity price of around N1,122 per litre, implying a cost differential of roughly 12 per cent,” the report said.
However, Idoko maintained that such comparisons must include fuel quality metrics before drawing conclusions, saying the analysis should not rely on “a blanket statement to say that imported products are cheaper than what we are refining here”.
In the report, the World Bank Group advised the Federal Government to allow the importation of petrol into the country, saying, “Reopen the PMS market to competition. The suspension of import licences since January 2026 has reduced competition, allowing prices to exceed import-parity levels.
“Allowing qualified marketers to resume imports would restore competition, reduce pricing distortions, and better align domestic prices with global benchmarks. Greater market contestability would also strengthen supply security by reducing reliance on a single refinery and broadening sourcing options while remaining consistent with domestic refining objectives.”
However, this came with backlashes. Nigerians across various social media platforms, forcing the World Bank to pull down the report while making clarifications that its position was not a blanket endorsement of fuel importation but part of a broader strategy tied to market reforms and consumer protection.
“In the case of Nigeria, the focus should be to provide targeted support to the most vulnerable people through their well-functioning social safety net system, and the World Bank Group stands ready to step up its existing support,” it stated.
The Dangote refinery supplied over 92 per cent of the petrol consumed in February as the Nigerian Midstream and Downstream Petroleum Regulatory Authority suspended import licences. Reports have it that the NMDPRA reviewed the decision amid the disruption caused by the Middle East crisis.
Under-dispensing of petroleum products at retail outlets across Nigeria would no longer be tolerated and identified violations could lead to the revocation of the culprits’ licences.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) handed down the caution in an industry circular, in which it directed all retail outlet operators to immediately calibrate and verify their dispensing pumps and totalisers to ensure accurate measurement to be certain that consumers receive the full quantity of products for which they pay.
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The NMDPRA said it had observed incidents of under-dispensing at retail outlets nationwide, describing the practice as a serious breach of consumer trust.
It stated that it had intensified inspections and enforcement activities across the country and would take action against outlets found to be under-dispensing, operating with improperly calibrated equipment or otherwise compromising dispensing accuracy.
“Persistent or serious violations will be subject to appropriate sanctions, up to and including revocation of the outlet’s licence, in line with NMDPRA’s regulations,” the authority stated.
The regulator urged operators to take immediate corrective measures where discrepancies are identified, stressing the need to maintain the integrity and accuracy of petroleum product transactions.
The NMDPRA also directed the Major Energy Marketers Association of Nigeria (MEMAN), the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) to promptly communicate the directive to their members and support compliance across the industry.
The House of Representatives has extended the implementation period of the capital component of Nigeria’s 2025 budget from September 30 to December 31, 2026, citing economic difficulties and challenges affecting the execution of capital projects.
The decision was taken on Tuesday during plenary after Majority Leader Julius Ihonvbere moved a motion seeking an amendment to the Appropriation (Repeal and Enactment) Act, 2025.
Ihonvbere told lawmakers that several factors affecting the Nigerian economy had made it difficult to conclude the implementation of the capital component before the existing September 30 deadline.
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He said the extension was necessary to ensure that incomplete implementation would not be attributed simply to the expiration of the deadline previously approved by the National Assembly.
The House subsequently fast-tracked the bill through first, second and third readings before approving the extension.
The Senate also passed the measure, allowing Ministries, Departments and Agencies (MDAs) additional time to complete capital projects for which funds had already been appropriated and released.
Why the projects remain unfinished
Senate Leader Opeyemi Bamidele gave further details on the factors affecting implementation, pointing to procurement, contract execution, mobilisation, certification of completed works and payment processes.
According to Bamidele, these stages can affect the ability of MDAs to complete projects within the existing budget implementation timeframe.
He said the extension was intended to protect ongoing public investments, facilitate the completion of critical projects and prevent the waste of public resources already appropriated and released.
The latest decision therefore gives government agencies another three months to complete eligible projects and utilise funds already provided for the 2025 capital programme.
Fourth extension of 2025 capital budget
Tuesday’s decision marks the fourth extension of the implementation deadline for the 2025 capital budget.
The National Assembly first moved the deadline from December 31, 2025, to March 31, 2026.
It subsequently extended the deadline to June 30 and later to September 30.
The latest extension now moves the deadline to December 31, 2026.
The repeated extensions have kept portions of previous capital allocations in the implementation cycle while the government works through outstanding projects and obligations.
Earlier in June, lawmakers had cited procurement timelines, project implementation challenges and administrative processes as reasons for extending the capital budget deadline to September.
Previous budget pressures
The issue has also been linked to the backlog of capital projects from previous budget years.
A recent analysis reported that about ₦16.8 trillion in capital expenditure from the 2024 and 2025 budgets had been rolled into the 2026 fiscal year, with funding constraints and delays in releases contributing to the backlog.
The report said the 2026 capital budget was partly structured to address outstanding obligations from previous years.
President Bola Tinubu had also acknowledged in his 2026 budget speech that the implementation of the 2025 budget faced competing execution demands and the transition between budget years.
He disclosed that only ₦3.10 trillion, representing about 17.7 per cent of the 2025 capital budget, had been released as of the third quarter of 2025, while priority was given to completing 2024 capital projects.
The new December 31 deadline is therefore expected to provide additional time for MDAs to complete projects already at various stages of execution.
The House adjourned plenary until October 13, 2026, after considering the budget extension.
The Malindi Environment and Land Court in Kenya has directed that the construction of the proposed Dangote refinery in Lamu County be placed on hold until further hearing.
The development came after some farmers and local inhabitants of Chandavai, an area in Lamu County, opposed the move, citing cases of “forceful eviction” and the destruction of their properties.
According to a Bloomberg report on Monday, Judge Jane Onyango ordered that “the status quo prevailing” be maintained.
The report noted that the court will provide further directions on the case on October 14, according to the order, which was issued on September 25 but made public on Monday.
A lawyer representing the petitioners, George Wakahiu, told Bloomberg that the ruling means no construction of the project should begin until the court meets on October 14.
The Dangote refinery project entails “forceful eviction of the plaintiffs from their lands, damage and destruction of their properties and yet there is no resettlement plan for them,” according to the petitioners. Dangote and the Kenyan authorities have yet to comply with the nation’s environmental code that requires “a mandatory environmental impact assessment be done before the implementation of any major project,” they said.
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The refinery also fails to comply with Kenya’s constitution, “which requires that the necessary public participation” be conducted, according to the court filings, the report stated.
However, in a report by Reuters on Tuesday, the business conglomerate of Africa’s richest man, Dangote Group, said in a statement that the court was yet to stop the refinery’s groundbreaking ceremony.
It noted that activities at the proposed refinery site would be affected pending the October 14 court hearing.
“The court has not halted the groundbreaking ceremony of the refinery at this stage. However, activities at the site may be affected by the ruling, as both parties are required not to carry out activities until the case is heard on 14th October,” the statement read.
The PUNCH reports that Kenyan President William Ruto said his government was fast-tracking administrative processes for the proposed Dangote refinery in Lamu. This is as Africa’s richest man, Aliko Dangote, said the planned facility would be bigger than the existing Nigerian plant.
Ruto spoke on Friday during a tour of the Dangote Petroleum Refinery in Lekki, Lagos, ahead of the September 30 groundbreaking ceremony for the proposed 700,000-barrel-per-day refinery in Lamu, Kenya.
The Kenyan President said his government had already secured the land for the project and is working on other requirements to eliminate bureaucratic bottlenecks and ensure that construction and subsequent operations are not delayed.
He described the proposed refinery as a regional project that would expand industrial activities in East Africa, create employment opportunities and improve the technical skills of the region’s workforce.
Courtesy – The PUNCH
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