WorldStage– The recent World Bank recommendation urging Nigeria to further liberalise its fuel importation is a blot on an otherwise rigorous report from the global lender, energy experts agreed. They warned of the consequences on the Petroleum Industry Act and quality.
The report on Nigeria’s macro-economic outlook titled Nigeria’s Development Update had warned of monopoly in the downstream sector, mainly by local refiners, especially Dangote Petroleum Refinery.
According to the report, the leading refiner had increased its gantry price many times, selling at higher rates than the few importers do. The bank believes the differentials can worsen inflation especially during the global energy shock the US-Israel-Iran war created.
Ken Ife, a professor of economics however, said this is the best time Nigeria seek self-sufficiency in domestic oil production.
“You cannot come to a country that is struggling, and which has just developed a vision of economic self reliance and then advise it to reverse course and return to fuel importation,” Ife said in a television interview.
“That kind of recommendation undermines everything Nigeria is trying to achieve.”
According to him, the law is very clear in prioritizing domestic production; anything to the contrary is not just subverting government policy but also violating the act.
“We are on track to build refining capacity that will exceed domestic demand and position Nigeria as an energy exporter. How can anyone credibly suggest that we abandon this progress and return to reckless import dependence?”
He considered the advice an unsupported addition to the World Bank report.
“This conclusion was strangely parachuted into what was largely a strong analysis. There is no evidence supporting a return to imports at a time when major refining countries are restricting exports,” he said.
Kelvin Emmanuel, another energy experts, also criticised the World Bank’s position as flawed and disconnected from prevailing market realities.
“The World Bank has retracted the report. If you check the World Bank Nigeria website, you will see that the document has been taken down,” he said in a separate television interview.
Emmanuel argued petrol imported could not be cheaper than locally refined fuel
“There is no marketer today that can land petrol into Nigeria at less than ₦1,759 per litre when you factor in freight, insurance and supply chain risks,” he said.
According to him, the Middle East crisis has altered pricing dynamics, noting that while futures prices hover around $100 per barrel, spot prices are significantly higher.
“Dated Brent is trading at about $144 per barrel, which translates to roughly ₦1,249 per litre before distribution and other costs,” Emmanuel stated. “The only way imported petrol can appear cheaper is if standards are compromised, which, historically, has been the case,” he said.
He dismissed the link between resource scarcity and inflation the bank made.
“Fuel price pressures in Nigeria are largely contrived. If local refiners receive crude supply as stipulated by law, prices will stabilise and volatility will reduce,” he said.
After the bank pulled the statement and retracted, following criticisms, it stated in a release Nigeria should widen its social safety net.
Emmanuel, however, opposed that advocacy, good as social safety is.
“You do not borrow money to share. Borrowing is meant for capital projects and human development, not consumption. If support is needed, it should come in the form of grants, not loans,” he said.
The government removed fuel subsidy and other forms of support the fuel importers enjoyed in 202, after years of advice by the bank and other global institutions which saw the subsidy regime as unsustainable.
Many saw the commissioning of Dangote refinery, the largest in Africa, as a major milestone from the private sector on the road to energy sufficiency.
The refinery now supplies about 60 million litres of petrol to local markets daily.
