The House Committee on Petroleum Resources (Downstream) will probe foreign-currency charges, fuel import licence allocations and market distortions as Nigeria expands domestic refining

The House of Representatives has begun moves to end dollar-denominated charges on locally refined petroleum products and investigate alleged irregularities in the allocation of fuel import licences, as lawmakers seek to strengthen Nigeria’s downstream petroleum sector.

Also read: Reps seek fuel supply stability amid import debate

The House Committee on Petroleum Resources (Downstream), chaired by Ikenga Ugochinyere, announced the planned interventions in Abuja on Tuesday, July 28, 2026, during an interactive session with key industry groups, 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.

The engagement forms part of the committee’s wider consultations on proposed amendments to the Petroleum Industry Act and other reforms intended to encourage domestic refining, protect energy security and create a more competitive downstream market.

Ugochinyere said the committee would invite the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the Nigerian Upstream Petroleum Regulatory Commission, the Nigerian Ports Authority, the Central Bank of Nigeria, refiners and other relevant agencies to explain issues raised by industry stakeholders.

“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.”

A major concern raised by the committee was the continued imposition of dollar charges by the Nigerian Ports Authority on petroleum products refined and transported entirely within Nigeria.

Ugochinyere argued that such charges increase operating costs for domestic petroleum businesses and could ultimately put additional pressure on the price consumers pay for Premium Motor Spirit.

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

The committee chairman also promised to investigate claims that fuel import licences issued during the first three quarters of 2026 were repeatedly allocated to the same group of operators.

“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 planned probe comes as Nigeria’s petroleum industry undergoes a significant transition, with the emergence of large-scale domestic refining capacity altering a market that historically relied heavily on imported refined products.

Ugochinyere said lawmakers must therefore find a careful balance between protecting investments in domestic refineries and safeguarding the interests of petroleum marketers who have invested in storage, transportation and distribution infrastructure over several decades.

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

He said the committee’s objective was to establish a framework that would support domestic refining, preserve healthy competition and ensure reliable fuel supplies.

For DAPPMAN, however, the growing refining capacity must be accompanied by reforms to address what it described as structural distortions across the downstream value chain.

Presenting the association’s memorandum, its Executive Secretary, Olufemi Adewole, said at least 72 of Nigeria’s 154 licensed petroleum depots had recorded little or no consistent trading activity over the past year.

“From the records of the NMDPRA, 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 commencement of operations at the Dangote Refinery, Adewole raised concerns about the concentration of PMS supply and what he described as an emerging near-monopoly.

“Our experience has been one of mixed feelings, bordering on an almost total monopoly in the supply of PMS by the mega refinery,” he 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 alleged that the same group of marketers received fuel import allocations during the first, second and third quarters of 2026, urging lawmakers to demand greater transparency from the downstream regulator.

Adewole maintained that retaining the option to import petroleum products was necessary as a contingency against supply shortages during refinery maintenance, operational disruptions or logistical difficulties.

“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,” he said.

The association further challenged the continued use of foreign currency for certain charges on domestic petroleum transactions, arguing that such costs should not apply to products moved entirely within Nigeria.

DAPPMAN said marketers were sometimes billed at both loading and discharge points and called for an end to what it described as duplicated port charges and dollar-denominated billing for domestic operations.

The association also urged the Federal Government to accelerate the dredging of waterways, rehabilitate petroleum pipelines and depots, improve rail transportation for fuel distribution and develop a national downstream logistics master plan.

IPMAN National President, Abubakar Shettima, also backed stronger domestic refining but said marketers continued to face high financing costs, multiple taxes, foreign exchange volatility and inadequate storage infrastructure.

Shettima called for policies that would give marketers fair access to locally refined products while reducing regulatory and financial costs that can eventually be reflected in pump prices.

“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,” he said.

He proposed the establishment of a specialised Petroleum Bank capable of providing operators with single-digit interest loans, arguing that commercial borrowing costs were placing additional pressure on the downstream sector.

“Today, marketers borrow from commercial banks at interest rates of up to 32 per cent. Those costs are eventually passed on to consumers,” Shettima said.

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

The IPMAN president also urged multinational oil companies involved in petroleum imports to invest more heavily in domestic refining, saying increased local production would complement existing capacity and reduce reliance on foreign supplies.

He further suggested that independent petroleum marketers should be given an opportunity to participate in the management of Nigeria’s state-owned refineries, arguing that private-sector involvement could help accelerate their revival.

The committee’s intervention comes at a critical point in Nigeria’s downstream petroleum transition.

The implementation of the Petroleum Industry Act, the expansion of domestic refining and the changing role of imports have created new opportunities, but also exposed tensions over market access, regulatory costs and competition.

At the heart of the debate is how Nigeria can build a stronger domestic refining industry without creating a market dominated by a small number of suppliers or undermining the investments of established marketers.

The House committee is expected to continue consultations with regulators, refiners, NNPC Limited and other stakeholders before deciding on possible amendments to the Petroleum Industry Act and other legislative measures.

For lawmakers, the emerging framework will need to achieve more than simply reducing fuel imports.

Also read: Reps demand tough action over South Africa attacks

It must also ensure transparent regulation, fair competition, sustainable investment and dependable supply, while preventing unnecessary costs from filtering through to Nigerian consumers.