Despite Nigeria ‘s increasing local refining capacity, fuel and diesel imports shockingly totaled N930 billion in February 2025, prompting worries about economic policy.
Consequently, this substantial reliance clearly highlights critical gaps that persist within local production, urgently demanding swift and strategic investments to effectively curb these costly dependencies.
This development has raised concerns about the country’s energy policy direction and economic sustainability.
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reveal that Nigeria imported N5.5 trillion in petroleum products from October 2024 to January 2025.
Meanwhile, Dangote Refinery and The Nigerian National Petroleum Company (NNPC) NNPCL’s Port Harcourt Refinery boosted output, yet Nigeria’s heavy foreign fuel reliance persists.
This stark contrast underscores urgent gaps in domestic refining despite production expansions.
Transitioning to solutions, analysts urge accelerated infrastructure investments and policy reforms to bridge supply deficits.
Without swift action, fuel import dependency risks draining national resources amid rising global energy costs.
Local Refining Capacity Falls Short
In February 2025, NMDPRA justified its decision to license oil marketers for fuel imports, citing a shortfall in domestic supply.
Ogbugo Ukoha, Executive Director of Distribution, Systems, Storage, and Retailing Infrastructure at NMDPRA, explained that local refineries currently meet less than 50% of Nigeria’s daily fuel consumption.
“Before the current administration took office, the daily PMS supply sufficiency exceeded 60 million litres, averaging about 66 million litres per day.
However, following the removal of fuel subsidies in May 2023, consumption dropped significantly to an average of 50 million litres per day,” Ukoha stated.
“Of this, less than half is supplied by domestic refineries, necessitating imports to bridge the gap.”
Despite the operational status of key refineries such as those in Warri and Port Harcourt and private facilities like Waltersmith and Aradel, Nigeria imported 701.75 million litres of petrol and 265.88 million litres of diesel in February 2025.
These figures underscore ongoing structural challenges within the sector.
Dangote Refinery’s Stockpile Raises Question
Aliko Dangote, President of Dangote Industries Limited, disclosed in February that his refinery had over 500 million litres of petrol and petroleum products worth N600 billion in stock.
While this demonstrates the growing capacity of private refineries, it also raises questions about why Nigeria remains heavily reliant on imports.
Business consultant Dan Kunle warned that the import-dependent approach could undermine recent gains in naira stability. “The continued reliance on fuel imports exerts pressure on foreign exchange reserves and highlights inefficiencies in local refining and distribution,” Kunle noted.
Structural Bottlenecks Persist
Despite progress in local refining, experts point to several industry bottlenecks that hinder self-sufficiency in fuel production. These include logistics challenges, production scale-up issues, and inefficiencies in supply chain management.
Kunle emphasized the need for a clearer policy framework to address these challenges. “While it’s encouraging that more refineries are coming online, the government must prioritize resolving structural inefficiencies to reduce reliance on imports and ensure energy security,” he said.
Policy Implications
The current situation presents a paradox: while Nigeria is increasing its refining capacity, it continues to spend heavily on fuel imports. This duality raises questions about the alignment of policies with the country’s long-term energy goals.
As Nigeria navigates this complex landscape, stakeholders are calling for a more strategic approach to energy planning—one that prioritizes self-sufficiency and leverages local refining capabilities to reduce forex pressure and stabilize the economy.
For now, the high import figures serve as a stark reminder of the work that remains to be done in achieving energy independence.
