World Bank's Fuel Import Advice Criticized as Retrogressive and Against PIA - Energy Expert

Professor Ken Ife, an energy economist, has voiced strong opposition to the World Bank's recent suggestions for Nigeria to expand its fuel importations and completely liberalise the downstream petroleum sector. He characterised these recommendations as "ill-timed, backward, and inconsistent with Nigeria’s own laws."

During a television interview discussing Nigeria's economic trajectory, Ife acknowledged that some aspects of the World Bank's latest Nigeria Development Update were analytically sound. However, he asserted that its stance on fuel imports runs counter to the nation's objectives of achieving energy independence and developing domestic refining capabilities.

"It is inappropriate to advise a struggling country that has just formulated a vision for economic self-sufficiency to reverse its course and resume importing," he stated.

According to Ife, these suggestions directly conflict with the Petroleum Industry Act (PIA), which mandates that domestic crude supply be prioritised for local refineries under the framework of the Domestic Crude Obligation.

"The law is unambiguous; priority must be given to local refining capacity. Recommending that Nigeria abandon this objective and revert to import dependency is not only contrary to government policy but also violates the PIA itself," Ife emphasised.

He cautioned that an increase in fuel imports would expose Nigeria to global supply volatility, deplete foreign exchange reserves, and potentially harm ongoing investments in domestic refining, particularly as private sector players are expanding their capacity.

"We are currently developing refining capacity that is expected to surpass local demand, positioning Nigeria as an energy exporter. How can anyone suggest we abandon this progress and return to uncontrolled importation?" he questioned.

The economist further argued that the World Bank's conclusion lacked empirical justification.

"This conclusion seems to have been inserted into an otherwise robust report without proper grounding. There is no evidence to support advising Nigeria to rely on imports when major refining nations are limiting their exports," he commented.

While recognizing the World Bank's accurate analysis of Nigeria's macroeconomic indicators, such as GDP growth forecasts and sectoral performance, Ife maintained that its position on fuel policy could exacerbate economic difficulties.

Regarding inflation and the cost of living, he contended that Nigeria's economic challenges stem not from a scarcity of resources but from policy inconsistencies in the implementation of domestic supply strategies.

"The fuel price pressures in Nigeria are largely artificial. If local refiners are supplied crude under the legal terms, they will be able to stabilise prices and reduce market volatility," he explained.

He also objected to the World Bank's proposal for expanding social safety nets funded through borrowing, warning that such measures would contravene Nigeria's fiscal regulations.

"While social safety nets are essential, borrowing money for their funding is inappropriate. The law permits borrowing for capital projects and human development, not for consumption. If support is required, it should be in the form of grants, not loans," he advised.

Professor Ife concluded that Nigeria's long-term economic stability depends on reducing import dependency and enhancing local value addition across various sectors.

"The sustainable path forward is clear: develop local refining, increase processing capacity, and build economic sovereignty. Exporting raw materials while importing finished goods only serves to export jobs and import poverty," he added.

The World Bank's recommendations have reignited discussions surrounding Nigeria's fuel policies, with critics expressing concerns that increased imports could undermine recent advancements in domestic refining and leave the economy vulnerable to external shocks.