In 2024, Nigeria’s expenditure on petrol imports surged dramatically, doubling from the previous year, underscoring the nation’s continued reliance on imported fuel despite efforts to boost domestic refining capabilities.
Escalating Import Costs
According to the National Bureau of Statistics (NBS), Nigeria’s petrol import bill reached an unprecedented ₦15.42 trillion in 2024, a 105.3% increase from ₦7.51 trillion in 2023. This significant rise occurred even as the country sought to enhance local refining to reduce dependence on foreign fuel sources.
Domestic Refinery Developments
The Dangote Petroleum Refinery, inaugurated in May 2023, was anticipated to transform Nigeria’s refining landscape with its 650,000 barrels per day (bpd) capacity, positioning it as the largest single-train refinery globally. However, by July 2024, the refinery was operating at approximately 50% capacity, with plans to reach 85% (around 550,000 bpd) by year’s end. Additionally, the Port Harcourt Refining Company (PHRC), managed by the Nigerian National Petroleum Company Limited (NNPC), resumed operations with a 60,000 bpd capacity, while the Warri Refining and Petrochemical Company (WRPC) restarted in December 2024.
Persistent Import Reliance
Despite these advancements, domestic refineries have struggled to meet the nation’s fuel demands. Consequently, oil marketers imported approximately 2.3 billion litres of petrol between September 11 and December 5, 2024. This ongoing importation has exerted additional pressure on Nigeria’s foreign exchange reserves, prompting concerns among independent marketers and retailers.
Industry Perspectives
Clement Isong, Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), highlighted the role of importation in fostering market competitiveness. He stated, “Importation contributes to the market’s competitiveness. The price movements and market competition are results of importation. While we advocate for local refining, ensuring that locally refined fuel prices compete with imported prices keeps pump prices as low as possible.”
Looking Ahead
The disparity between escalating import bills and underperforming domestic refineries underscores the challenges Nigeria faces in achieving fuel self-sufficiency. As the nation continues to invest in its refining infrastructure, stakeholders remain hopeful that increased local production will eventually reduce import dependence and stabilise fuel prices.
