World Bank Fuel Import Advice ‘Retrogressive, Violates PIA’ – Energy Expert

World Bank Fuel Import Advice ‘Retrogressive, Violates PIA’ – Energy Expert

LAGOS, NIGERIA — An energy economist, Ken Ife, has faulted recent recommendations by the World Bank urging Nigeria to deepen fuel importation and fully liberalise its downstream petroleum sector, describing the proposal as “ill-timed, backward and inconsistent” with the country’s legal framework.

Speaking during a televised interview on Nigeria’s economic outlook, Ife said while parts of the Bank’s latest Nigeria Development Update were analytically sound, its stance on fuel importation undermines the nation’s drive for energy independence and expansion of local refining capacity.

According to him, advising Nigeria to revert to import dependence contradicts the provisions of the Petroleum Industry Act (PIA), which prioritises domestic crude supply for local refiners under the Domestic Crude Obligation framework.

“The law is very clear; priority must be given to local refining capacity. Advising Nigeria to abandon that and return to import dependence is not only against government policy but against the PIA itself,” he said.

The economist warned that increased reliance on imports would expose Nigeria to global supply shocks, strain foreign exchange reserves and weaken ongoing investments in domestic refining, particularly as private sector operators continue to scale up capacity.

He argued that Nigeria is on track to build refining capacity that could exceed domestic demand and position the country as a net exporter of refined petroleum products, making any recommendation to increase imports counterproductive.

Ife also questioned the empirical basis of the World Bank’s position, stating that there is no clear evidence supporting a return to import dependence at a time when some major refining countries are tightening export volumes.

On inflation and the rising cost of living, he maintained that Nigeria’s challenges stem largely from policy inconsistencies rather than resource constraints, stressing that proper implementation of domestic supply frameworks would stabilise fuel prices.

“Fuel price pressures in Nigeria are largely contrived. If local refiners are given crude at the terms stipulated by law, they will stabilise prices and reduce volatility,” he said.

The professor further criticised the Bank’s recommendation for expanded social safety nets funded through borrowing, warning that such an approach conflicts with Nigeria’s fiscal responsibility laws.

“Social safety nets are necessary, but borrowing to fund consumption is not sustainable. The law allows borrowing for capital projects and human development, not for recurrent spending. If support is needed, it should come as grants, not loans,” he added.

Ife concluded that Nigeria’s long-term economic stability depends on reducing import dependence and strengthening local value addition across key sectors.

“The sustainable path is clear; develop local refining, expand processing capacity and build economic sovereignty. Exporting raw materials while importing finished products only exports jobs and imports poverty,” he said.

The World Bank’s recommendations have continued to generate debate among stakeholders, with critics warning that increased fuel importation could undermine recent gains in local refining and expose the economy to external vulnerabilities.