Reps reject dollar billing for local fuel

The House of Representatives has begun moves to address concerns in Nigeria’s downstream petroleum sector, opposing the continued use of U.S. dollar-denominated charges on locally refined petroleum products and announcing plans to investigate alleged irregularities in the allocation of fuel import licences.

The House Committee on Petroleum Resources (Downstream) disclosed this on Tuesday during an interactive session with 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 the committee’s consultations on proposed amendments to the Petroleum Industry Act (PIA) and broader reforms aimed at strengthening domestic refining, improving energy security and promoting competition in the downstream petroleum sector.

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), refinery operators and other stakeholders to respond to issues raised by marketers.

“We will meet with the NMDPRA, NUPRC, refiners, the NPA, the CBN and other relevant agencies to address these concerns. The outcome will form part of our downstream reforms, including proposed amendments to the Petroleum Industry Act and legislative measures to address identified gaps,” Ugochinyere said.

He criticised the continued collection of port charges in U.S. dollars for petroleum products refined and transported within Nigeria, describing the practice as harmful to the economy.

“It is not in the country’s interest that operators engaged in domestic downstream activities are still being charged in dollars. These costs ultimately affect the pump price of Premium Motor Spirit,” he said.

The committee also pledged to investigate claims that fuel import licences for the first three quarters of 2026 were allocated repeatedly to the same group of marketers.

“We have taken note of the allegations regarding the lopsided allocation of import licences. We will seek explanations from the NMDPRA on the criteria used in issuing these licences,” Ugochinyere added.

He stressed the need for policies that would encourage investment in local refining while protecting the investments of marketers who have built storage and distribution infrastructure over the years.

“We must support domestic refineries while also protecting marketers’ investments. At the same time, Nigeria must maintain energy security to guarantee fuel availability if local refineries experience disruptions,” he said.

Presenting DAPPMAN’s memorandum, Executive Secretary Olufemi Adewole said structural challenges had left many petroleum depots inactive.

According to him, 72 of Nigeria’s 154 licensed depots recorded little or no trading activity in the past year because of an uneven operating environment, persistent losses and limited access to alternative sources of supply.

Adewole welcomed the operations of the Dangote Refinery but warned against what he described as an emerging monopoly in the supply of Premium Motor Spirit (PMS).

“Our experience has been mixed, with an almost monopolistic situation in PMS supply. Although the Petroleum Industry Act provides for a deregulated market, that has not reflected in practice,” he said.

He also accused the NMDPRA of repeatedly allocating import permits to the same marketers, calling for greater transparency and fairness in future allocations.

DAPPMAN maintained that fuel imports should remain available as a contingency measure whenever domestic production is insufficient to prevent fuel shortages and long queues.

The association also criticised what it described as duplicated port charges and the continued billing of domestic petroleum transactions in foreign currency despite a presidential directive suspending such practices.

It further urged the Federal Government to accelerate dredging of major waterways, rehabilitate pipelines and depots, improve rail transportation for petroleum products and develop a national downstream logistics master plan.

IPMAN National President, Abubakar Shettima, commended the government’s efforts to encourage private investment in refining but said marketers continue to face high borrowing costs, multiple taxation, foreign exchange volatility, inadequate storage facilities and limited access to refinery products.

He called for policies that would promote domestic refining while preserving competition, proposing the establishment of a specialised Petroleum Bank to provide single-digit interest loans to petroleum operators.

According to Shettima, marketers currently obtain commercial loans at interest rates of up to 32 per cent, with the costs ultimately passed on to consumers.

He also urged multinational oil companies involved in fuel importation to invest in local refining and suggested that independent marketers be allowed to participate in the management of Nigeria’s state-owned refineries to support their revival.

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

Lawmakers are expected to engage regulators, refiners, NNPC Limited and other stakeholders before proposing legislative measures aimed at creating a more transparent, competitive and sustainable downstream petroleum market while strengthening Nigeria’s long-term energy security.