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Nigeria’s spending on imported refined petroleum products has dropped sharply by 54 per cent within two years, falling from $14.58bn in the first nine months of 2023 to $6.71bn in the corresponding period of 2025.
The figures are contained in the Central Bank of Nigeria’s (CBN) Balance of Payments (BoP) reports, reviewed by The PUNCH, and signal a sustained moderation in fuel imports amid reforms in the downstream oil sector.
Steady Decline Over Three Years
A comparative review of the 2023 and 2024 full-year data, alongside the Q3 2025 BoP presentation, shows a consistent year-on-year decline:
- Jan–Sept 2023: $14.58bn
- Jan–Sept 2024: $11.38bn
- Jan–Sept 2025: $6.71bn
Between 2023 and 2024, fuel import spending fell by $3.20bn (21.9%). The decline accelerated further in 2025, with imports dropping by $4.67bn (41%), marking the steepest contraction within the period reviewed.
Overall, Nigeria spent $7.87bn less on refined fuel imports in the first nine months of 2025 than in the same period of 2023, reflecting a significant easing of foreign exchange outflows linked to petroleum imports.
Early Signs of Import Substitution
CBN data also showed a 41 per cent year-on-year decline in refined petroleum imports by the third quarter of 2025, pointing to early signs of import substitution as new and rehabilitated refineries scale up operations.
Nigeria’s reduced foreign exchange spending on fuel imports aligns with broader structural reforms aimed at easing pressure on external reserves and stabilising the naira.
For decades, the country relied heavily on imported refined petroleum products due to limited domestic capacity, weak industrial output, and chronic underinvestment in refining infrastructure—making fuel imports one of the largest drains on foreign exchange earnings.
Subsidy Removal and Market Reforms
The removal of petrol subsidies in 2023 marked a major turning point. Higher pump prices curbed consumption and reduced arbitrage-driven demand, while stricter foreign exchange controls helped limit speculative FX pressure associated with fuel importation.
At the same time, domestic supply has gradually expanded, particularly in the downstream oil sector. Industry analysts note that competition has intensified as marketers struggle to compete with supply from the $20bn Dangote Petroleum Refinery in Lekki.
Despite these gains, Nigeria still spent an estimated $6.71bn importing refined petroleum products in the period under review—highlighting the country’s continued, though reduced, dependence on foreign fuel supplies.
Experts: Imports Reduced, Not Eliminated
Commenting on the trend, renowned energy economist Professor Wumi Iledare cautioned against claims that petrol importation has ended entirely.
In a note titled “Dangote Refinery, Petrol Imports, and Market Reality,” Iledare said assertions that Nigeria no longer imports petrol reflect “understandable optimism” but overstate the economic reality of the downstream market.
“Dangote Refinery has significantly improved domestic supply conditions and reduced Nigeria’s marginal reliance on imported petrol. However, neither Dangote Refinery nor petroleum marketers determine national supply outcomes,” he said.
According to Iledare, Nigeria’s downstream petrol market operates within an oligopolistic, import-parity-anchored framework, where prices and supply stability are disciplined by the option to import—not necessarily by the physical presence of imported cargoes.
“Even when no petrol cargoes are landing, the credible threat of imports remains the market anchor. Importation continues to serve as a risk-management tool for stock security, demand surges, logistics disruptions, and refinery operational risks.”
He added that the Petroleum Industry Act (PIA) entrenches liberalisation and competition in the downstream sector, leaving no room for discretionary declarations that fuel imports have ended.
“The correct policy framing is reduced marginal import dependence, not import elimination. Precision in language matters, because credibility in energy policy is built on economic fundamentals, not celebratory headlines.”
Market Analysts See Structural Shift
Also speaking, Jeremiah Olatide, Chief Executive Officer of petroleumprice.ng, described the development as a major shift in Nigeria’s downstream oil market.
“A 54 per cent reduction in fuel import spending in just two years signals increased local production, largely driven by the Dangote Petroleum Refinery,” he said.
Olatide noted that the refinery’s reported supply of over 50 million litres of petroleum products daily aligns with CBN data showing a sharp moderation in refined fuel imports.
“Nigeria is gradually becoming more energy secure through a combination of expanding local refining and residual imports,” he added.
Quarterly Trends and Broader Trade Picture
Further analysis of the BoP data shows that refined fuel imports declined steadily throughout 2025:
- Q1 2025: $3.26bn
- Q2 2025: $1.80bn
- Q3 2025: $1.65bn
However, Nigeria’s overall import bill increased, rising from $9.20bn in Q1 to $10.30bn in Q3, driven mainly by non-oil imports, which climbed to $7.08bn in the third quarter.
On the export side, earnings from crude oil, gas, and refined petroleum products rose to $13.05bn in Q3, up from $11.25bn in Q1, supported largely by crude oil exports of $8.45bn.
Gas exports, however, declined sharply—falling 30.21 per cent quarter-on-quarter and 20.07 per cent year-on-year—due to infrastructure constraints and global market pressures.
The Road to Energy Self-Sufficiency
The sustained moderation in fuel imports comes amid the Federal Government’s long-standing push for energy self-sufficiency. While recent data suggest progress, analysts caution that Nigeria’s transition will remain incomplete until domestic refineries operate consistently at scale and fully meet local demand.
