NMDPRA resumes issuance of fuel import permits…

● Rising oil prices and reforms draw investors’ attention to Nigeria

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has stepped up the issuing of fuel import licenses, amounting to a total volume of 600,000 tonnes, or about a quarter of the country’s domestic consumption.

The easing of restriction on foreign fuel imports comes in the context of a recent presidential directive to remove former NMDPRA CEO Saidu Mohammed and replace him with Rabiu Umar, outgoing sales and marketing director at Dangote Industries Limited (DIL).

While supporters of continued fuel imports insist on security of supply, competition and the need to protect the Nigerian market from monopolistic tendencies, those who oppose argue that fuel imports are economically harmful and undermine the rationale for Aliko Dangote to invest $20 billion in domestic refining.

But citing eight local sources familiar with the matter, S&P Global reported that the Authority granted six Nigerian marketers new gasoline import licenses on May 6, worth 600,000 tonnes.

The move represents a significant policy departure from recent market rules, which have seen the NMDPRA heavily regulate foreign arrivals of Nigeria’s main motor fuel in order to support the country’s new national refinery owned by Aliko Dangote.

After an initial crackdown in October 2025, the NMDPRA issued limited licenses to import gasoline to six companies in late March 2025, S&P said, but let them expire at the end of the first quarter, leaving uncertainty over its future policy trajectory.

In its latest round of licensing, the authority continued to limit the number of companies allowed to import foreign gasoline, but substantially increased quotas to cover more than triple the previously approved volume.

According to a list shared by a well-placed market source and various West African traders, licensed companies, including Matrix, AA Rano, AYM Shafa, Nipco, Pinnacle and Bono, will be allowed to import between 60,000 and 150,000 tonnes of petrol, depending on the type of permit, the report adds.

Such entities will typically purchase products from the nearby Lomé offshore market, where larger international trading firms and oil companies will send the fuel and load it onto smaller vessels. None of the marketing experts nor the NMDPRA were available for official comment.

Mohammed, the immediate past CEO of the NMDPRA, was suddenly removed days ago after just four months in office, while Umar’s appointment was confirmed by the Senate on May 7. It is unclear whether Umar has officially assumed office.

According to the latest NMDPRA data, the Dangote refinery was operating at 94% of its capacity in March and producing enough fuel to cover the country’s entire domestic petrol consumption. However, supplies to the local market have decreased.

S&P Global Commodities at Sea data showed Nigeria imported 60,000 b/d, or 218,000 tonnes, of oil in April, more than double the record low in March but still less than half the 2026 average. Since the start of this year the NMDPRA said it has suspended the issuing of import licences.

In an interview at the Dangote refinery, the country’s only commercial-scale operation, its chief executive, David Bird, said the refinery was ready to fully satisfy the local market, but expressed concern about the regulator’s ability to police the arrival of lower-quality fuel products.

“The only reason it could be lower is through inferior or sanctioned products. We are more than happy to compete on a level playing field from a product quality perspective at import parity prices,” S&P Global said.

Meanwhile, Nigerian assets are rallying across stocks, bonds and currency as investor confidence in President Bola Tinubu’s economic agenda grows.

The nation’s stock benchmark has risen 66% this year in dollar terms, the best performance after South Korea’s Kospi out of 92 global indexes tracked by Bloomberg. This brought his progress over the last 12 months to almost 200%. Local currency government bonds outperformed most emerging market peers, while the naira is Africa’s second-best performing currency, behind only the Zambian kwacha, Bloomberg reported.

Tinubu’s restoration of the Nigerian economy involved the elimination of expensive fuel subsidies and multiple exchange rates that had left the currency overvalued and discouraged investors. According to the International Monetary Fund (IMF), economic growth will accelerate to 4.1% this year, compared to 3.3% when Tinubu took office three years ago. It also earned the country a credit rating upgrade from Moody’s Ratings and Fitch Global Ratings in 2025.

With the adoption of more credible economic policies, investors are returning to the Nigerian capital markets. Rising oil prices since the start of the war with Iran have provided a budgetary windfall as the country relies on crude exports for about a third of government revenue.

Foreigners bought $181.8 billion ($133 million) in Nigerian shares, up from $72.3 billion a month earlier, even as conflict in the Middle East sparked a global sell-off in stocks, according to the latest stock market data.

“Nigeria is moving from a credibility discount to an execution story,” said Romain Bordenave, emerging markets portfolio manager at Edmond de Rothschild Suisse SA. “The conflict with Iran is definitely pushing Nigeria to be one of Africa’s favorites,” Bordenave added.

With a market capitalization of $104 billion, Nigeria’s market is now larger than New Zealand’s and on par with Portugal, Ireland and Morocco, according to data compiled by Bloomberg.

Among the best-performing stocks this year are companies benefiting from economic growth: Bua Cement PLC rose 140%, Zenith Bank PLC rose 104% and MTN Nigeria Communications PLC, a mobile phone provider, gained 57%. Oil and gas exploration firm Seplat Energy Plc nearly doubled, while rival Aradel Holdings PLC rose 172%.

The domestic stock market received a boost when FTSE Russell recently announced the reclassification of Nigeria to frontier market status with effect from September. Inclusion in the indicator would attract demand from index funds.

The country’s stock market is also getting a vote of confidence from Africa’s richest man, Dangote, who plans to sell about 10% of his oil refinery company in Nigeria, with further listings on other African stock exchanges. The refinery has an estimated market valuation of between $25 billion and $45 billion.

“The FTSE reclassification is very positive for the Nigerian market,” said Samuel Sule, managing director of Renaissance Capital Africa. “Many global institutional investors follow the index and as such, the inclusion will attract increased market volume and activity. The Dangote Refinery IPO is expected to further strengthen the market.”

However, Nigeria’s economy is not fully protected from the risks of war with Iran. Despite Nigeria being the continent’s largest oil producer, local fuel costs have risen alongside rising international prices. The agriculture sector will take a hit from rising fertilizer prices, pushing up food costs and threatening a slowdown in inflation that sent the consumer price index to a five-year low in February, Bloomberg said.

[THISDAY]

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