Fuel Import Debate Heats Up as Experts Fault World Bank Advice, Cite Legal and Economic Risks

By Auwal Ahmad Umar

Fresh controversy has trailed recent policy recommendations by the World Bank on Nigeria’s petroleum sector, with leading energy experts warning that the advice could derail the country’s push for self-reliance and undermine existing laws.

The criticism follows suggestions contained in the Bank’s Nigeria Development Update, which encouraged deeper fuel importation and full liberalisation of the downstream oil sector. Analysts, however, say such proposals are not only poorly timed but also risk reversing gains in local refining capacity.

A renowned energy economist, Ken Ife, described the recommendation as counterproductive, arguing that it contradicts Nigeria’s long-term economic strategy.

“You cannot ask a country striving for economic independence to return to a system that made it vulnerable in the first place,” he said during a televised interview. “That approach weakens the very foundation Nigeria is trying to build.”

Ife pointed out that the advice runs contrary to the provisions of the Petroleum Industry Act, which prioritises domestic crude supply to local refineries under the Domestic Crude Obligation framework. According to him, sidelining local refining in favour of imports would amount to disregarding both policy direction and statutory requirements.

He warned that increasing reliance on imported fuel could expose Nigeria to global supply shocks, drain foreign exchange reserves, and discourage ongoing investments in domestic refining—particularly at a time when private sector players are expanding capacity.

“We are gradually building enough refining strength to meet local demand and even export. Reversing that progress would be a costly mistake,” he added.

Another industry analyst, Kelvin Emmanuel, echoed similar concerns, questioning both the practicality and credibility of the recommendation. He revealed that the contentious report had reportedly been withdrawn from the World Bank’s website, further fueling debate over its conclusions.

Emmanuel dismissed claims that imported petrol could be cheaper than locally refined products, insisting that prevailing global conditions make such projections unrealistic.

“Given current crude oil prices and logistics costs, no importer can deliver petrol into Nigeria at a lower price than what is being suggested,” he said. “When you factor in freight, insurance and market risks, the numbers simply do not add up.”

He explained that rising crude prices, driven in part by geopolitical tensions in the Middle East, have significantly altered global pricing dynamics. According to him, any perception of cheaper imports often comes at the expense of product quality.

“The only time imported fuel appears cheaper is when standards are compromised—and that has been a recurring issue in the past,” he noted.

On the broader economic impact, Emmanuel argued that Nigeria’s fuel price pressures are less about scarcity and more about inconsistencies in implementing domestic supply policies. He maintained that strict adherence to local crude supply obligations would stabilise prices and reduce volatility.

He also criticised the Bank’s position on expanding social safety nets through borrowing, warning that such an approach could worsen the country’s fiscal burden.

“Support systems are necessary, but financing them with loans raises serious concerns. Borrowing should be tied to development projects, not consumption,” he said.

While both experts acknowledged that parts of the World Bank’s economic analysis remain valuable, they cautioned that its recommendations on fuel policy could have unintended consequences if adopted without careful consideration.

As Nigeria navigates its energy transition and economic reforms, the debate highlights a growing divide between global advisory institutions and local industry stakeholders over the best path toward sustainable growth and energy security.