Nigeria spends ₦930 billion on fuel imports in February

DDM News

Nigeria is Africa’s largest oil producer but still depends on fuel imports despite having abundant crude oil reserves.

Diaspora digital media (DDM) gathered that the country refines only a small portion of its petroleum products locally, leading to heavy reliance on imported fuel.

Years of underinvestment, mismanagement, and operational failures have weakened Nigeria’s refining sector, forcing dependence on foreign petroleum products.

Nigeria’s three state-owned refineries—Port Harcourt, Warri, and Kaduna—have operated below capacity due to technical and maintenance issues.

This inefficiency has resulted in billions of naira spent annually on fuel imports, straining foreign exchange reserves.

The Petroleum Industry Act (PIA), introduced in 2021, aimed to boost local refining by attracting private investment.

Private refineries like Dangote have increased production, but local supply still falls short of national demand.

Massive fuel import bill despite rising refining capacity

Despite increased refining activities, Nigeria spent ₦930 billion on fuel imports in February 2025 alone.

Official data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) confirmed the importation of millions of litres of fuel.

Oil marketers imported 701.75 million litres of petrol and 265.88 million litres of diesel in February.

Between October 2024 and January 2025, Nigeria spent approximately ₦5.5 trillion on imported fuel.

This spending highlights Nigeria’s continued dependence on foreign petroleum products despite ongoing refinery upgrades.

The government had expected new refineries like Dangote to reduce import reliance, but challenges persist.

NMDPRA’s Executive Director, Ogbugo Ukoha, confirmed that domestic refineries supply less than half of Nigeria’s daily fuel needs.

“Of the 50 million litres consumed daily, less than 50 percent comes from local refineries,” Ukoha stated.

“The shortfall is covered through imports, in line with the Petroleum Industry Act (PIA),” he added.

Economic implications and forex concerns

Experts warn that Nigeria’s reliance on fuel imports could destabilize the economy and weaken the naira.

Business consultant Dan Kunle cautioned that paying for fuel imports in dollars reduces Nigeria’s foreign exchange reserves.

“Local refining is improving, but logistics bottlenecks and slow production scale-up remain challenges,” Kunle noted.

Despite increasing production, refineries struggle with supply chain inefficiencies, affecting fuel availability.

Dangote Refinery reportedly holds over 500 million litres of petrol and ₦600 billion worth of petroleum products.

However, its full impact on fuel independence remains uncertain, raising concerns about long-term energy sustainability.

With billions still spent on imports, questions persist about when Nigeria will achieve complete energy self-sufficiency.

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