World Bank Fuel Import Advice Ill-timed, Contradicts PIA – Economic Expert

An energy economist, Professor Ken Ife, has faulted recent recommendations by the World Bank urging Nigeria to expand fuel importation and fully liberalise its downstream petroleum sector.
He described the advice as ill-timed, backward and inconsistent with Nigeria’s legal and policy framework.
Ife spoke during a televised interview on Nigeria’s economic outlook, where he reviewed the Bank’s latest Nigeria Development Update.
He acknowledged that parts of the report were analytically sound but said its position on fuel importation undermines Nigeria’s drive for energy independence and local refining.
According to him, advising Nigeria to deepen fuel imports contradicts the country’s strategic goal of reducing external dependence.
“You cannot ask a country working towards economic independence to reverse course and resume import dependence,” he said.
The economist argued that the recommendation also runs contrary to the provisions of the Petroleum Industry Act (PIA).
He explained that the law prioritises domestic crude supply to local refiners under the Domestic Crude Obligation framework.
“The law is clear on prioritising local refining. Encouraging import dependence goes against both government policy and the PIA,” he said.
Ife warned that increased importation could expose Nigeria to global supply disruptions, weaken foreign exchange reserves and discourage investment in domestic refining.
He noted that private sector players are already expanding refining capacity, positioning the country to meet local demand and potentially export refined products.
“We are building capacity that could exceed domestic needs. Reverting to importation at this stage would be counterproductive,” he added.
He further criticised the recommendation as lacking empirical support, arguing that global refining trends do not justify increased reliance on imports.
According to him, many refining countries are tightening export supply, making import dependence riskier.
While agreeing with the Bank’s assessment of Nigeria’s macroeconomic outlook, including growth projections and sectoral performance, Ife cautioned that its fuel policy stance could worsen economic conditions.
On inflation and cost of living, he said current pressures are driven more by policy inconsistencies than resource constraints.
He maintained that effective implementation of domestic supply frameworks would stabilise fuel prices.
“If local refiners receive crude under the terms provided by law, price volatility will reduce,” he said.
Ife also criticised the Bank’s recommendation on expanding social safety nets through borrowing.
He argued that such an approach contradicts fiscal rules guiding public debt usage.
“Social support is important, but borrowing to fund consumption is not sustainable. Financing should come through grants, not loans,” he said.
He stressed that Nigeria’s long-term economic stability depends on reducing import dependence and strengthening local value addition.
“The sustainable path is to build local capacity, not export raw materials and import finished products,” he added.
The World Bank’s recommendations have sparked debate among stakeholders, with concerns that increased fuel importation could undermine recent gains in local refining and expose the economy to external shocks.