Nigeria’s reliance on imported petrol has continued to rise sharply, even with significant investments aimed at increasing local refining capacity, highlighting the country’s ongoing dependency on foreign fuel sources.
Data from the National Bureau of Statistics’ foreign trade report revealed a staggering 105.3% surge in petrol import costs, which reached N15.42 trillion in 2024, up from N7.51 trillion in 2023. This surge in petrol imports comes despite expectations that Nigeria’s domestic refining capacity, bolstered by major investments in local refineries, would reduce the need for imports.
The inauguration of the Dangote Petroleum Refinery in 2023, with a capacity of 650,000 barrels per day, was expected to significantly lower the nation’s import dependency. In addition, efforts to revive existing refineries, such as the Port Harcourt Refining Company and the Warri Refining and Petrochemical Company, were seen as crucial steps towards improving local production. However, despite these investments, Nigeria’s refineries have yet to operate at full capacity, unable to meet domestic fuel demand.
Over the last five years, Nigeria’s petrol import expenditure has seen a consistent upward trend. In 2020, the country spent N2.01 trillion on fuel imports, which more than doubled to N4.56 trillion in 2021. The expenditure grew again in 2022, reaching N7.71 trillion, before slightly declining to N7.51 trillion in 2023. But in 2024, fuel import costs hit a historic high of N15.42 trillion, marking the largest petrol import bill in the country’s history.
The continued importation of petrol is in stark contrast to previous statements from some oil marketers, who had expressed intentions to halt imports and focus on domestic production. Despite the beginning of production at major refineries, oil marketers continued to import significant quantities of fuel. In the last quarter of 2024, marketers imported 2.3 billion litres of petrol between September and December.
In addition to the Dangote refinery, other local refineries like the Port Harcourt Refining Company and Warri Refining and Petrochemical Company are crucial to the nation’s fuel supply. However, the PHRC is only producing at a fraction of its capacity, with the old plant output limited to 60,000 barrels per day, far below its full capacity of 210,000 barrels per day.
Although the Warri refinery started operations in December 2024, the increased capacity has not been enough to curb the volume of imports. The situation has led to concerns, especially from independent marketers and retailers, who argue that the ongoing imports, costing the country over N6 trillion, have placed additional strain on Nigeria’s foreign exchange reserves.
Clement Isong, the Executive Secretary of the Major Energy Marketers Association of Nigeria (MEMAN), weighed in on the situation, explaining that while local refining is desirable, fuel imports remain crucial for maintaining competitive prices in the market. He emphasized that competition from imported petrol ensures that local fuel prices stay as low as possible, benefiting consumers.
“Importation promotes competition, which drives down the price of petrol. The price movements we enjoy and the competition in the market are due to imports,” Isong said. “We want local refining, but to keep the prices competitive, locally refined fuel must compete with imports.”
Despite these challenges, the Nigerian government continues to push for solutions that would enhance domestic refining and reduce dependence on foreign fuel, yet the road to self-sufficiency remains long and filled with obstacles.
