Why Nigeria’s Petrol Imports Are Increasing Despite Local Refining Efforts

• Local Refineries Meet Less Than Half of  Demand
• Most of Nigeria’s Crude Had Already Been Committed to Foreign Buyers-NNPC
• A Clear Violation Of The Petroleum Industry Act (PIA)
• We May Sell to Nigerians in Dollars if Naira-for-Crude Issue Is Not Resolved – IPMAN.”

For years, Nigeria has pursued energy independence, yet the nation remains one of the world’s largest petrol importers—despite having some of the biggest crude oil reserves in Africa.

The numbers paint a troubling picture: in 2024 alone, Nigeria’s petrol import bill skyrocketed to ₦15.42 trillion, more than double the ₦7.51 trillion spent in 2023.

This sharp increase raises fundamental questionsabout the effectiveness of government policies, the state of local refining, and whether vested interests are deliberately sabotaging Nigeria’s path to self-sufficiency.

The logic behind boosting local refining capacity is simple—refining crude oil domestically would reduce dependence on imports, strengthen the naira, and create jobs. Yet, Nigeria continues to rely on foreign petrol, worsening its foreign exchange crisis and fueling inflation.

Between October 2024 and January 2025, oil marketers imported petrol worth ₦5.5 trillion, and in February alone, another ₦930 billion was spent.

This massive spending contradicts Nigeria’s economic reform agenda, particularly the Petroleum Industry Act (PIA), which was supposed to end fuel importation by promoting local refining. Instead, Nigeria seems trapped in a cycle of dependence—one that benefits a few at the expense of the country’s economic stability.

A major problem fueling skepticism is the contradictions in refinery production data.

The Petroleum Industry Act (PIA) clearly states that petrol imports should only happen when local refineries cannot meet demand. Official data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) estimates that Nigeria’s daily petrol consumption is around 50 million litres.

The claim is that local refineries meet less than half of this demand, supposedly justifying the continued reliance on imports.

The Dangote Refinery alone processes 500,000 barrels of crude per day, while the Warri and Port Harcourt refineries, operating at 60% and 70% capacity, contribute an additional 117,000 barrels daily.

In total, this amounts to 617,000 barrels per day, which—based on global conversion standards—translates to over 46 million litres of petrol daily.

However, the Nigerian National Petroleum Company Limited (NNPCL) reports that local production is under 25 million litres daily. This discrepancy raises critical questions:

• Is the actual output of Warri and Port Harcourt refineries being underreported?

• Are there inefficiencies in crude supply to these refineries?

• Is the NMDPRA’s data flawed or manipulated to justify continued importation?

Without clear answers, suspicions persist that certain interests profit from keeping Nigeria dependent on fuel imports, even when local refining capacity exists.

One of the main arguments for allowing continued petrol importation is that it prevents Dangote Refinery from having a monopoly. Agencies like the NNPCL and the Federal Competition and Consumer Protection Commission (FCCPC) argue that importation promotes market competition.

True competition in the oil sector would come from supporting other local refineries rather than flooding the market with imported petrol.

In France and the U.S., regulatory bodies encourage domestic fuel production while ensuring fair pricing. Even in Nigeria’s telecommunications sector, the government used price caps to regulate competition—without undermining local service providers.

If Dangote Refinery were inflating prices, the NMDPRA has the power to intervene. But so far, there is no evidence of price manipulation.

Recently, the NNPCL suspended its Naira-for-crude deal with Dangote and other refineries, claiming that most of Nigeria’s crude had already been committed to foreign buyers.

This decision violates the Petroleum Industry Act (PIA), which mandates that local refineries should receive crude oil allocations before exports.

Despite Nigeria’s crude oil production increasing in recent months, petrol imports continue to rise.

Either way, Nigeria is shooting itself in the foot—exporting crude oil only to buy back refined petrol at a premium.

The continued reliance on petrol imports is not just an economic problem—it’s political.

For years, a cartel of fuel importers and government insiders have made billions from subsidized fuel imports, inflated contracts, and forex manipulations. Even after the fuel subsidy removal in mid-2023, the system remains riddled with corruption.

Without addressing these fundamental issues, Nigeria will never escape the trap of fuel importation.

Nigeria is at a crossroads. The country has a 650,000-barrel-per-day refinery that can significantly reduce fuel importation. But unless key policy changes are made, this opportunity will be wasted.
Nigeria has a rare opportunity to achieve energy independence, but weak enforcement, vested interests, and policy inconsistencies threaten to derail this progress.

If local refining is properly supported, it will create jobs, save foreign exchange, and boost economic growth. But if petrol imports continue at this alarming rate, Nigeria will remain trapped in a cycle of dependence, inflation, and economic instability.

Meanwhile,The National Publicity Secretary of the Independent Petroleum Marketers of Nigeria (IPMAN) Chinedu Ukadike has said that petrol marketers may be forced to retail petroleum products in dollars following the decision of the Dangote Petroleum Refinery to end the sale of petroleum products in Naira and sell in the dollar.

This follows the expiration of the first phase of the Naira-for-Crude arrangement between the federal government and local refineries, including Dangote.

He stated that many marketers buy from the Dangote refinery, and they may have to start selling in dollars if the federal government and the Dangote refinery as well as other local refineries do not reach an agreement on the Naira-for-Crude arrangement.

“I was taken aback (by the announcement by Dangote), I thought that we had forgone that era whereby the issue of the Naira had been settled between the federal government and Dangote. However, it had a specific period for which it would run so that they be able to test run the validity. 

“It is quite unfortunate that after the federal government has stabilized the Naira to crude issue, we are still talking about it again. 

“…as marketers if we are going to be buying petroleum products in dollars, it means that we will also sell in dollars. Because we must pass the bulk to the final consumer. Whatever happens in the distribution chain goes to the pump,” he said.