Chris Okpoko
Recent media reports highlight a troubling reality: in February 2025, Nigeria imported petrol and diesel valued at an astonishing N930 billion despite growing local refining capacity. This stark contradiction raises urgent questions about the economic logic behind licensing oil marketers to bring fresh petroleum products. In addition to the staggering N930 billion bill in February, oil marketers authorized by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) imported products worth N5.5 trillion between October 2024 and January 2025. Moreover, according to the National Bureau of Statistics, the cost of petrol imports skyrocketed by 105.3 percent in 2024, reaching a staggering N15.42 trillion—an increase from N7.51 trillion in 2023.
The rise in petrol import bills over the past five years is alarming. In 2020, Nigeria spent N2.01 trillion on fuel imports, a figure that more than doubled to N4.56 trillion in 2021. This further escalated to N7.71 trillion in 2022 before slightly declining to N7.51 trillion in 2023. Yet, in 2024, fuel import expenditure surged to an unprecedented N15.42 trillion, recording the largest petrol import bill in Nigeria’s history. This surge came despite enhancements in domestic refining capacity, underscoring Nigeria’s persistent vulnerability to foreign exchange volatility, global oil price fluctuations, and the unfortunate delays in achieving energy self-sufficiency.
Anticipating a shift away from imported fuel, Nigerians looked forward to the operations of the 650,000 barrels-per-day Dangote Refinery, the Port Harcourt Refining Company (PHRC) which has a capacity of 210,000 bpd but is currently producing only 60,000 bpd, and the Warri Refinery and Petrochemical Company (WRPC) boasting a capacity of 125,000 bpd. The relentless rise in fuel import bills, even as local refining capacity expands, calls for a critical reassessment of Nigeria’s energy policies. As a nation rich in oil resources, Nigeria finds itself ensnared in a paradox that invites scrutiny of its oil management strategies and prompts a deeper examination of broader economic implications.
According to the News Agency of Nigeria, the NMDPRA has continually sanctioned oil marketers to import fuel to bridge the shortfall, asserting that local refineries currently fulfill only 50 percent of daily fuel consumption needs. This justification for continued petrol imports to address the deficit raises eyebrows. Furthermore, Ogbugo Ukoha, Executive Director of Distribution, Systems, Storage, and Retailing Infrastructure of NMDPRA, remarked, “Just before the current administration came in, the daily PMS (Premium Motor Spirit) supply sufficiency was always more than 60 million liters.” Currently, Nigeria’s daily petrol consumption hovers around 50 million liters—a significant drop attributed to the cessation of petrol subsidies by President Bola Tinubu in May 2023, resulting in a staggering 92 percent decrease. Ukoha clarified, “Of these 50 million liters averaged daily, less than 50 percent is contributed by domestic refineries. Consequently, the shortfall, as mandated by the Petroleum Industry Act (PIA), is sourced through imports.”
Recently, the Nigerian Coalition of Civil Society Organizations (NICOSO) voiced profound concerns over the exorbitant costs associated with ongoing petrol imports, citing their detrimental impact on the economy. In a powerful position paper presented during a peaceful protest in Abuja, the coalition condemned actions that “threaten our nation’s economic future and sovereignty.” They argued that the Nigerian National Petroleum Company Limited, NNPCL’s policy of prioritizing imported Premium Motor Spirit (PMS) over local refining jeopardizes economic stability, drains foreign reserves, weakens the Naira, and stifles local initiatives aimed at fostering energy self-sufficiency and job creation.
In a nation historically recognized as one of Africa’s largest crude oil producers, it is disheartening that Nigeria continues to rely on significant petrol imports. This dependence arises from a combination of factors, including inadequate refining infrastructure, corruption, and operational inefficiencies within local refineries. Allegations of graft erode trust in the institutions tasked with overseeing refinery operations and fuel distribution. Furthermore, subsidies intended to nurture domestic refining have often been misallocated or siphoned off, creating an environment where the sector struggles to thrive. To forge a sustainable future, Nigeria must confront these challenges head-on, re-evaluate its strategies, and commit to fostering a robust, self-sufficient energy sector that reflects its vast resources and potential.
The fluctuating global oil prices and foreign exchange volatility significantly exacerbate Nigeria’s challenges with fuel imports. When international crude oil prices rise, the cost of imported petrol also increases, placing a strain on the economy. Many local refiners struggle to compete with these international prices due to inefficiencies and outdated technology, which perpetuates Nigeria’s dependency on imports. Additionally, the depreciation of the naira increases the cost of imports, making it more expensive to acquire refined petroleum products from abroad.
The rising petrol import bills have implications beyond economic concerns; they also impact social dynamics and national security. High fuel costs contribute to inflation, raising the cost of living for average Nigerians and worsening poverty levels. Historically, fuel shortages have led to protests and civil unrest, revealing the public’s dissatisfaction with the government’s management of the oil sector. Ensuring energy security through reliable local refining is crucial for maintaining social stability and fostering economic growth.
In recent years, government initiatives to revitalize the local refining sector have shown some positive developments. New investments and upgrades in facilities, such as the Dangote Refinery—one of the largest single-train refineries in the world—have taken place. Older refineries, including the Port Harcourt and Warri refineries, have undergone repairs and improvements to enhance their operational capacities. These advancements are expected to significantly reduce import levels.
During a tour of the refinery complex by a Zambian government delegation, Aliko Dangote revealed that Dangote Petroleum Refinery holds over 500 million liters of petrol and billions of naira worth of total petroleum products in stock. He stated that the refinery is currently producing 57 million liters of Premium Motor Spirit (PMS), commonly known as petrol, daily. This production capacity is sufficient to meet 100% of Nigeria’s local demand for refined petroleum products.
To effectively address the rising petrol import bill, Nigeria must prioritize comprehensive reforms within its oil sector. This includes streamlining operations in existing refineries, combating corruption, and investing in technological upgrades to enhance efficiency. Furthermore, the government should explore partnerships with private entities to promote investment and innovation in local refining capacity.
If President Tinubu’s renewed hope agenda aims to reform the economy for sustainable inclusive growth; unlock energy and natural resources for development; improve infrastructure and transportation as growth enablers; and accelerate diversification through industrialization, digitization, creative arts, manufacturing, and innovation, then the current efforts to boost domestic refining capacity should be supported.
Given the country’s vulnerability to foreign exchange fluctuations, which strain government finances and consumer purchasing power, the President should instruct the Central Bank of Nigeria to block fuel importers’ requests for foreign currency to encourage local production.
In conclusion, while Nigeria’s increasing local refining capacity holds promise for reducing the country’s petrol import bill, significant challenges remain. A multifaceted approach that addresses corruption, embraces technological advancements, and fosters collaboration between public and private sectors is essential for the nation to achieve energy self-sufficiency. Only through sustained commitment to reform can Nigeria hope to overcome its dependency on petrol imports, securing economic stability and social peace.
