Reps move to end dollar charges on locally refined petrol

The House of Representatives has moved to address growing concerns in Nigeria’s downstream petroleum sector, opposing the continued use of US dollar-denominated charges for petroleum products refined and transported within the country while also pledging to investigate allegations of irregularities in the allocation of fuel import licences.

The House Committee on Petroleum Resources (Downstream) disclosed the planned intervention during an interactive session with major industry stakeholders, including the Independent Petroleum Marketers Association of Nigeria (IPMAN), the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) and the Major Energies Marketers Association of Nigeria (MEMAN).

The engagement is part of ongoing consultations on proposed amendments to the Petroleum Industry Act (PIA) and wider reforms aimed at strengthening domestic refining, improving energy security, encouraging investment and promoting a transparent and competitive downstream petroleum market.

Chairman of the committee, Ikenga Ugochinyere, said the lawmakers would invite the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian Ports Authority (NPA), the Central Bank of Nigeria (CBN), refiners and other relevant institutions to respond to concerns raised by industry operators.

He said the outcome of the consultations would guide proposed amendments to the PIA and other legislative measures designed to address regulatory gaps, reduce operational challenges and improve the efficiency of the downstream petroleum sector.

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“We’ll be meeting with the NMDPRA, NUPRC, the refiners—both modular refinery owners and the large refinery operators—as well as the NPA, the CBN and other relevant agencies on the issues that have been raised,” Ugochinyere said.

“These will form part of our downstream reforms, including proposed amendments to the Petroleum Industry Act and legislative motions to correct identified gaps.”

Ugochinyere expressed concern over reports that some port-related charges for petroleum products refined and moved entirely within Nigeria were still being billed in US dollars.

He said foreign currency charges on domestic petroleum transactions could increase the operating costs of marketers and eventually contribute to higher petrol pump prices, despite the fact that the products are produced and distributed locally.

“We have taken special note of the issue of dollar-denominated charges by the Nigerian Ports Authority,” the lawmaker said.

“It is not good for the economy that, at a time like this, people involved in domestic downstream activities are still being charged in dollars. That ultimately affects the pump price of Premium Motor Spirit.”

The committee also said it would investigate allegations that fuel import licences for the first, second and third quarters of 2026 were repeatedly allocated to the same group of marketers.

Ugochinyere said the NMDPRA would be required to explain the criteria used in issuing import permits and clarify whether all qualified operators were given fair and transparent access.

“We have also taken note of what you said about the lopsidedness in the issuance of import licences, where allocations for the first, second and third quarters went to the same set of operators,” he said.

“We will raise these questions when the NMDPRA appears before the committee to explain the criteria used in issuing those licences.”

The committee chairman said Nigeria must develop a balanced policy that supports the country’s expanding domestic refining capacity while protecting the investments of petroleum marketers who have built storage, distribution and logistics infrastructure over several decades.

He noted that the volume of fuel imports should reduce as more local refineries begin operations. However, he said Nigeria must retain reliable contingency arrangements to prevent shortages when domestic refineries undergo maintenance or experience production and logistics disruptions.

“How do we encourage and protect owners of domestic refineries while also protecting the investments of marketers?” Ugochinyere asked.

“We cannot continue importing the same volume of petroleum products as before, given that more refineries are coming on stream. At the same time, we must guarantee national energy security in case local refineries experience disruptions.”

“We need a balanced framework that supports domestic refining, preserves healthy competition and ensures the country always has a reliable fuel supply.”

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Presenting DAPPMAN’s memorandum, the association’s Executive Secretary, Olufemi Adewole, called on lawmakers to address what he described as structural challenges affecting petroleum marketers and depot operators.

Adewole said at least 72 of Nigeria’s 154 licensed petroleum depots recorded little or no consistent trading activity over the past year.

According to him, the situation was linked to an uneven operating environment, persistent trading losses and limited access to alternative sources of petroleum products.

“Not fewer than 72 of the 154 depots nationwide had no regular or consistent trading activity in the last one year,” Adewole said.

“They are merely paying salaries without engaging in meaningful business. This is largely due to an uneven playing field, persistent trading losses and the inability to access alternative sources of supply.”

While welcoming the growth of domestic refining, including operations at the Dangote Refinery, DAPPMAN warned against excessive market concentration in the supply of Premium Motor Spirit (PMS), commonly known as petrol.

The association said the downstream market should remain competitive and provide qualified marketers with fair access to locally refined petroleum products.

“Our experience has been one of mixed feelings, bordering on an almost total monopoly in the supply of PMS by the mega refinery,” Adewole said.

“Although the Petroleum Industry Act provides for a fully deregulated market where prices are determined by market forces, that has not been our experience.”

DAPPMAN also raised concerns over the alleged repeated allocation of fuel import permits to the same group of marketers and called for greater transparency and fairness in future allocations.

“The same set of marketers received import allocations in the first, second and third quarters of 2026, as though other qualified operators do not exist,” Adewole said.

“This is unacceptable, and we urge this committee to ensure greater transparency and fairness in future allocations.”

The association maintained that fuel importation should remain available as a regulated contingency option whenever domestic refining capacity is unable to meet national demand.

According to DAPPMAN, maintaining an import option could help prevent fuel shortages during refinery maintenance, operational disruptions or major supply-chain challenges.

“In order to avoid the return of fuel queues, the import option provided under the Petroleum Industry Act must remain available as a regulated contingency mechanism whenever domestic supply is insufficient,” Adewole said.

The association also alleged that marketers were subjected to duplicated port-related charges for petroleum products moved entirely within Nigeria.

It said operators could be billed at the loading point and again at the discharge port, while some local petroleum transactions continued to attract foreign currency-denominated charges.

“Marketers are invoiced at the loading point and again at the discharge port for products moved entirely within Nigeria,” Adewole said.

“More critically, certain charges are still imposed in US dollars despite the purely domestic nature of these transactions.”

DAPPMAN urged the National Assembly to ensure compliance with government directives on foreign currency billing for local transactions and introduce reforms that would reduce logistics costs across the petroleum supply chain.

The association also called for accelerated dredging of major waterways, rehabilitation of pipelines and depots, improved rail transportation for petroleum products and the development of a national downstream logistics master plan.

The National President of IPMAN, Abubakar Shettima, commended the Federal Government for encouraging private investment in domestic refining but said petroleum marketers continued to face high borrowing costs, multiple taxation, foreign exchange volatility, inadequate storage facilities and limited access to locally refined products.

He called for policies that would strengthen local refining while preserving competition and ensuring equitable access to petroleum products.

“We support strengthening domestic refining, but we also need equitable access to locally refined petroleum products, affordable financing and reduced regulatory costs that ultimately increase pump prices,” Shettima said.

The IPMAN president proposed the establishment of a specialised Petroleum Bank to provide single-digit interest loans to operators in the downstream sector.

He said many marketers relied on commercial bank loans with interest rates of up to 32 per cent, adding that high financing costs were often passed on to consumers through petrol prices.

“Today, marketers borrow from commercial banks at interest rates of up to 32 per cent,” he said.

“Those costs are eventually passed on to consumers. We are proposing a Petroleum Bank that will provide single-digit interest loans, similar to what exists in the agriculture and industrial sectors.”

Shettima also urged multinational oil companies involved in fuel importation to invest in Nigeria’s domestic refining capacity and support the country’s transition towards greater self-sufficiency in refined petroleum products.

He said the expansion of local refineries could reduce Nigeria’s exposure to foreign exchange pressures and international supply disruptions while creating new investment and employment opportunities.

On the future of Nigeria’s state-owned refineries, Shettima suggested that independent petroleum marketers should be allowed to participate in their management and operations.

“If independent marketers are allowed to participate in operating the government refineries, we believe we can contribute significantly to their revival,” he said.

The House committee’s consultations come as Nigeria seeks to consolidate reforms in the downstream petroleum sector following the implementation of the Petroleum Industry Act and the expansion of domestic refining capacity.

The committee is expected to engage regulators, refiners, NNPC Limited, financial institutions and other stakeholders before proposing legislative measures aimed at improving transparency, encouraging investment, strengthening competition and ensuring a reliable supply of petroleum products.

The lawmakers’ intervention could influence future policies on local petrol pricing, fuel import permits, port charges, refinery access and downstream logistics as Nigeria works towards a more transparent, competitive and energy-secure petroleum market.

Reps move to end dollar charges on locally refined petrol