A Controversial Policy Recommendation and Its Implications
There is something deeply unsettling about a policy prescription that appears, triggers national alarm, and then quietly disappears. That is precisely what happened after the World Bank advised Nigeria in its April 2026 Nigeria Development Update to resume petrol imports. Four days later, it withdrew the report from its website, following a backlash.
The episode is not merely embarrassing for a global institution that prides itself on analytical rigour; it is an unambiguous warning about the risks of importing economic advice that is tone-deaf to domestic realities.
At the heart of the controversy was a seemingly straightforward argument. The Bank claimed that imported petrol could be about 12 per cent cheaper, roughly N1,122 per litre compared with N1,275 offered by Dangote Refinery at the time, and that reopening import licences would inject competition into Nigeria’s downstream sector, thereby moderating prices and easing inflation.
It argued that imports could serve as a hedge against supply disruptions, particularly if the Dangote Refinery experiences outages.
Framed within a broader push for liberalisation and efficiency, the recommendation appeared plausible on the surface. In reality, it is dangerously simplistic.
Legal and Economic Flaws
The first and most glaring flaw is its direct conflict with the Petroleum Industry Act (2021). The Act prioritises domestic refining and restricts imports where local capacity exists.
With Dangote already supplying about 72.3 per cent of Nigeria’s daily petrol consumption, estimated at 47.3 million litres, reopening import licences would not only undermine policy direction but potentially place Nigeria in violation of its own statute.
That the World Bank’s report failed to acknowledge this legal constraint is astonishing. Sound economic advice must begin with a country’s legal framework, not ignore it.
Beyond legality lies the deeper issue of economic logic. The Bank’s argument rests on a narrow price comparison. Yet, as energy expert Kelvin Emmanuel has pointed out, that comparison collapses under scrutiny.
No importer, he argues, can currently land petrol in Nigeria at the prices suggested by the Bank once freight, insurance, and supply chain risks are fully accounted for. In fact, landing costs could exceed N1,700 per litre under prevailing global conditions.
The more fundamental question the World Bank failed to answer is why locally refined petrol appears relatively expensive. As policy analyst Samaila Mohammed argues, the problem lies upstream.
The Dangote refinery purchases crude, often Nigerian grades, at international prices, operates in a high-cost environment marked by unreliable power, multiple levies and logistics challenges. It also faces unresolved disputes over crude supply terms with the NNPC.
These structural inefficiencies inflate costs. The logical solution is to fix them, not to undercut domestic refining with imports.
Broader Economic and Strategic Concerns
Encouraging imports at this stage would send a damaging signal to investors. The Dangote Refinery alone represents about $20 billion in private investment and a strategic pivot toward energy self-sufficiency.
Opening the floodgates to imports risks turning that investment into a stranded asset.
Muda Yusuf, Director-General of the Centre for the Promotion of Private Enterprise, warns that import liberalisation would “reverse recent progress,” increase foreign exchange demand, and weaken investor confidence.
It would also recreate the very conditions that led to the collapse of Nigeria’s refining sector in the first place, viz, overdependence on imports and exposure to external shocks.
The foreign exchange implications are particularly severe. Petrol imports are dollar-denominated. Increasing import volumes would raise demand for foreign currency, placing renewed pressure on the naira and external reserves.
A weaker naira feeds directly into inflation, raising the cost of everything from food to medicine. Any marginal savings at the pump would likely be wiped out by broader macroeconomic instability.
There is also the issue of energy security. In an era of geopolitical volatility, from Middle East tensions to fragile supply chains, countries are increasingly prioritising domestic production and resilience. Advising Nigeria to deepen its dependence on imported fuel at such a moment is not just outdated; it is reckless.
Even the World Bank appeared to recognise this belatedly, clarifying after the backlash that its recommendation was intended to be “phased” and should not undermine energy security.
Lessons from Past Mistakes
The episode reinforces a long-standing critique of the Bank’s tendency toward template-driven, one-size-fits-all prescriptions that often fail to account for local context.
Nigeria has lived through the consequences before. Under the Structural Adjustment Programme, policies championed by the World Bank and the International Monetary Fund led to currency devaluation, industrial decline, and widespread social hardship.
Similar outcomes have been recorded elsewhere. In Haiti, tariff reductions under World Bank/IMF pressure devastated domestic rice production as subsidised US imports flooded the market. In Bolivia, water privatisation in 2000 triggered price hikes and mass protests. In Zambia, the removal of fertiliser subsidies contributed to food insecurity before policy reversals became necessary.
By contrast, countries such as China charted their own path, combining state intervention with market reforms and often diverging from World Bank orthodoxy. The result has been one of the most remarkable economic transformations in history, including the eradication of extreme poverty by 2020.
To be clear, not all external advice is misguided. Institutions like the World Bank bring valuable expertise and a global perspective. But expertise is not infallible. When recommendations clash so fundamentally with local realities, they must be challenged.
A More Sustainable Path Forward
The debate, however, is not entirely one-sided. The PETROAN has supported reopening imports, arguing that it would enhance competition and potentially lower prices. This reflects legitimate concerns among downstream operators about monopolistic pricing in a market dominated by a single large refinery.
Competition is essential, but the form it takes matters. Importing fuel to compete with domestic refiners is a blunt instrument that risks undermining long-term capacity for short-term relief.
A more sustainable approach lies in fostering competition within Nigeria’s borders. This means accelerating the entry of new players, including the proposed BUA refinery, and supporting modular refineries across the country.
It also means addressing the chronic dysfunction of state-owned refineries in Kaduna, Warri, and Port Harcourt through privatisation or concessioning to capable operators.
Equally critical is resolving the issue of crude supply. The PIA provides for a Domestic Crude Supply Obligation, yet implementation remains inconsistent.
Ensuring that local refiners have access to crude at fair and transparent terms would significantly stabilise prices.
There is also a case for targeted, temporary interventions. Rather than blanket subsidies, the government could sell crude to local refiners at discounted rates or offer time-bound tax relief to offset structural disadvantages. Such measures would support domestic production without distorting the market indefinitely.
To guard against monopolistic behaviour by Dangote, regulators such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority can maintain a limited import window as a deterrent against abusive pricing, while enforcing transparency and adjusting policy as the market evolves.
Ultimately, the path to affordable fuel in Nigeria lies not in reopening the import floodgates but in fixing the domestic ecosystem by reducing costs, improving infrastructure, ensuring regulatory clarity, and fostering genuine competition at home.
The World Bank’s withdrawn recommendation should serve as a reality check, not because it was uniquely misguided, but because it reflects a broader pattern of external advice that prioritises theoretical efficiency over practical reality.
Nigeria cannot afford to outsource its economic thinking.
Policymakers must therefore interrogate every recommendation, no matter how authoritative its source, against the country’s laws, institutions, and long-term interests. They must resist the temptation of quick fixes that promise immediate relief at the expense of strategic goals.
Above all, Nigeria must commit to home-grown reforms designed with local knowledge, implemented with discipline, and sustained with political will. That is the only way to build an energy sector, indeed a wider economy that is not just efficient, but resilient, competitive, and sovereign.
Ultimately, the real danger is not the bad advice. It is taking it.
