Nigeria’s spending on imported refined petroleum products has fallen sharply over the past two years, signalling a gradual shift away from decades of heavy dependence on foreign fuel supplies.
Data from the Central Bank of Nigeria (CBN) show that fuel import costs dropped by 54 per cent, declining from $14.58bn in the first nine months of 2023 to $6.71bn over the same period in 2025. The figures were contained in the CBN’s Balance of Payments reports for 2023, 2024 and Q3 2025.
A closer look at the trend shows steady moderation. Import spending fell to $11.38bn in January–September 2024, before dropping sharply again in 2025. The latest figure represents a $7.87bn reduction compared with 2023, easing pressure on foreign exchange demand and external reserves.
The steepest contraction occurred in 2025, when fuel imports declined by 41 per cent year-on-year, pointing to early signs of import substitution as domestic refining capacity expands.
This shift comes amid broader economic reforms aimed at stabilising the naira and conserving foreign exchange. For decades, Nigeria relied heavily on fuel imports due to weak local refining capacity and underinvestment in infrastructure, making petroleum imports one of the largest drains on FX earnings.
The removal of petrol subsidies in 2023 marked a turning point. Higher pump prices curbed consumption and reduced arbitrage-driven demand, while tighter foreign exchange controls helped limit speculative import activity. At the same time, increased output from local refineries—most notably the Dangote Petroleum Refinery—has reshaped supply dynamics in the downstream oil market.
Energy economist Professor Wumi Iledare cautions, however, against claims that petrol imports have ended. He argues that while reliance on imports has reduced, Nigeria still operates within an import-parity framework.
“Dangote Refinery has significantly improved domestic supply conditions,” Iledare said, “but neither refineries nor marketers alone determine national supply outcomes.” According to him, imports continue to serve as a risk-management tool for supply disruptions, demand spikes and refinery downtime.
He added that the Petroleum Industry Act promotes liberalisation and competition, making it inaccurate to declare an end to fuel imports. “The right framing is reduced marginal import dependence, not import elimination,” he said.
Industry analysts broadly agree that the decline marks a structural shift. Jeremiah Olatide, CEO of petroleumprice.ng, described the 54 per cent drop as a “major milestone,” linking it to increased local production. He noted that Dangote Refinery’s reported supply of over 50 million litres daily aligns with CBN data showing reduced imports.
Quarterly figures further support the trend. Fuel imports fell from $3.26bn in Q1 2025 to $1.65bn by Q3, even as Nigeria’s total import bill rose due to higher non-oil imports.
While progress is evident, analysts say full energy self-sufficiency remains a work in progress. Sustained gains will depend on domestic refineries operating consistently at scale, improved infrastructure, and stable foreign exchange liquidity—beyond headline announcements.
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