Nigeria’s spending on imported refined petroleum products has dropped sharply by 54 per cent over the past two years, declining from $14.58bn in the first nine months of 2023 to $6.71bn in the same period of 2025, according to figures from the Central Bank of Nigeria’s Balance of Payments (BoP) report.
Data from the CBN show that fuel import expenditure fell from $14.58bn between January and September 2023 to $11.38bn during the corresponding period in 2024, before plunging further to $6.71bn within the first nine months of 2025.
The figures are based on a comparative review of the full-year 2023 and 2024 BoP data, as well as the third-quarter 2025 BoP presentation released by the apex bank and analysed by The PUNCH on Monday.
Overall, the data indicate a sustained slowdown in fuel importation, with import bills declining year after year throughout the period under review.
Specifically, Nigeria spent $11.38bn on refined petroleum imports between January and September 2024, representing a $3.20bn or 21.9 per cent reduction from the $14.58bn recorded in the same period of 2023. This pointed to a notable contraction in foreign exchange outflows linked to refined fuel imports.
The trend intensified in 2025, as fuel imports fell by an additional $4.67bn, or 41 per cent, to $6.71bn within the first nine months of the year—the sharpest year-on-year decline recorded in the period analysed.
In total, Nigeria spent $7.87bn less on refined fuel imports in the first nine months of 2025 compared with the same period in 2023, highlighting a significant easing of foreign exchange pressure tied to petroleum product imports.
CBN figures also showed a 41 per cent year-on-year drop in refined fuel imports by the third quarter of 2025, suggesting early signs of import substitution as new and rehabilitated refineries gradually increase output.
The PUNCH reports that the decline in foreign exchange spending on fuel imports coincides with broader structural reforms and market adjustments aimed at reducing pressure on external reserves and stabilising the naira.
For decades, Nigeria depended heavily on imports—particularly refined petroleum products—due to weak domestic production capacity, low industrial output and prolonged underinvestment in infrastructure. This dependence made import financing a major drain on the country’s foreign exchange earnings.
The removal of petrol subsidies in 2023 marked a key shift, as higher fuel prices curbed consumption and reduced arbitrage-driven demand. Combined with tighter foreign exchange management by the CBN, the policy helped moderate import volumes and curb speculative FX demand linked to fuel imports.
Another contributing factor has been the gradual increase in domestic supply, particularly in the downstream oil sector. Analysts also point to rising competition as marketers struggle to compete with supplies from the $20bn Dangote Petroleum Refinery in Lekki.
Despite the sharp decline, fuel importers still spent an estimated $6.71bn on refined products during the review period, underscoring Nigeria’s continued reliance on imported fuel, even as domestic refining capacity improves.
Although quarterly fuel import costs declined steadily, the data also revealed lingering structural challenges in the downstream sector.
Expert Insights
Commenting on the trend, energy economist Professor Wumi Iledare noted that while Nigeria’s dependence on imported petrol has reduced, it has not been completely eliminated. He cautioned against claims that fuel importation has ended following increased output from the Dangote Refinery.
In a note titled “Dangote Refinery, Petrol Imports, and Market Reality,” Iledare said assertions that Nigeria no longer imports petrol reflect optimism but exaggerate the actual dynamics of the downstream market.
He acknowledged that the Dangote Refinery has significantly improved domestic supply and reduced marginal reliance on imports, but stressed that neither the refinery nor marketers alone determine national supply outcomes.
According to him, Nigeria’s downstream petrol market operates under an import-parity–anchored framework, where prices and supply stability are influenced by the option to import rather than the physical arrival of imported cargoes.
Iledare added that fuel importation still serves as a risk-management mechanism to address stock security, demand spikes, logistics challenges and refinery operational risks. He also noted that the Petroleum Industry Act promotes liberalisation and competition, leaving no room for discretionary claims that petrol imports have ceased.
He argued that policy messaging should focus on reduced marginal dependence on imports rather than outright elimination, warning that inaccurate language could weaken policy credibility.
Similarly, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, described the 54 per cent drop in fuel import spending as a major shift driven largely by increased local refining capacity.
He said the Dangote Refinery’s reported daily supply of over 50 million litres of petroleum products aligns with CBN data showing a sharp moderation in refined fuel imports. According to him, the combination of rising domestic output and residual imports is gradually strengthening Nigeria’s energy security.
Further Analysis
A closer look at the quarterly BoP data shows that refined fuel imports stood at $3.26bn in Q1 2025, before declining to $1.80bn in Q2 and $1.65bn in Q3, reflecting a steady downward trend throughout the year.
However, Nigeria’s total import bill continued to rise, increasing from $9.20bn in Q1 to $9.62bn in Q2 and $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 improved, rising to $13.05bn in Q3 from $11.25bn in Q1, largely supported by crude oil exports, which reached $8.45bn in the third quarter.
Gas exports, however, declined sharply, falling by 30.21 per cent quarter-on-quarter and 20.07 per cent year-on-year due to infrastructure limitations and global market pressures.
While the data suggest that fuel imports are easing, analysts maintain that Nigeria’s journey toward full energy self-sufficiency will remain incomplete until domestic refineries consistently operate at scale and meet local demand.