Many Nigerians must have been disappointed by media reports that the country is still importing about 25 million litres of fuel daily. This is especially so that the 650,000 barrels per day Dangote Refinery has taken off, and even the hitherto moribund Port Harcourt Refinery has also resumed production. There are other modular refineries that have also started functioning.

However, none of these local refineries is involved in fuel importation.

Executive Director of Distribution Systems, Storage and Retailing Infrastructure, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Ogbugo Ukoha, who made the disclosures, said petrol importation became necessary to ensure that scarcity does not return to the downstream sector.

Let me speak a little bit about supply. All of us have experienced a yuletide free of any scarcity and let me just reconfirm that from year to year we saw an increase in the demand for PMS by 2021, 2022 up to 2023 just before the current administration came in,? Ukoha said. He added that ?the daily PMS supply sufficiency was always more than 60 million, in fact averaging about 66 million a day for PMS. And following Mr. President?s withdrawal of subsidy, the announcement on May 29th, 2023, we immediately saw a steep decline in consumption, and between then and as we speak, we?ve continued to do plus or minus 50 million?.

Ukoha, who was speaking with journalists after a stakeholders meeting in Abuja, last week, said: ?Of these 50 million litres averaging for each day, less than 50% of that is contributed by domestic refineries and so the shortfall, in accordance with the PIA (Petroleum Industry Act), is sourced by way of imports?.

That the figure is official would though have lent some credibility to the report, but it would not in any way obliterate the question of why.

Many Nigerians had hoped that when Dangote Refinery comes on stream, it would put an automatic end to fuel importation because it has the capacity to meet the country?s local fuel demand and even export.

Very little hope was hinged on any of the public refineries because they had remained a drain pipe, gulping huge public funds over the years, with little to show for it. That the Port Harcourt Refinery (though not producing at full capacity) has resumed production should be bonus to the local fuel market.

It is against this backdrop that Ukoha?s disclosure of the country still importing fuel would have come as a surprise to many Nigerians.

But it needn?t be so.

First, the country does not have enough crude to sell to the local refineries because we are not producing enough. Even then, a substantial amount of the crude that we produce had been sold upfront by the immediate past Muhammadu Buhari administration.

Second, the sector has been completely deregulated, especially with the withdrawal of fuel subsidy by the Bola Tinubu administration. So, those who want to continue to import fuel are free to do so, especially with subsidy now gone!

But it is not just a question of importation for the sake of it, but it also has a way of engendering competition so that we do not have the dangerous situation of a monopolist or two hijacking the sector and setting prices according to their personal whims and caprices. And this has turned out well so far, with both fuel importers and local producers now in a price war that is helping somewhat to modulate prices.

Notwithstanding this advantage, the ultimate goal should still be towards zero fuel import, especially if we are really serious about making substantial foreign exchange savings, with a view to shoring up the value of the nation?s currency.

So, the more local refineries; the merrier. But we must also be able to meet their demand for crude. (The Nation Editorial)

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