In February, Nigeria spent N930 billion on fuel imports, even though local refining capacity increased

Despite local refineries producing more, Nigeria spent N930 billion on petroleum imports in February.

Although local refining capacity has increased, Nigeria imported over N930 billion worth of gasoline and diesel in February 2025, prompting concerns about the economic rationale for granting licenses to oil marketers to import new petroleum products.

In addition to the N930 billion bill in February, data on fuel imports last month revealed that oil marketers registered by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) purchased goods valued at N5.5 trillion between October 2024 and January of this year.

Nevertheless, this scenario is occurring in spite of the Nigerian National Petroleum Company’s (NNPC) expanding capacity at both the Dangote and Port Harcourt refineries. Petroleum is produced at both refineries.

The Warri Refinery and other modular refineries, which are primarily located in the Niger Delta, also process diesel locally.

To solve shortages in the nation, the NMDPRA, the licensing agency for the import of petroleum products, claimed in February of this year that it had continued to authorize oil marketers to import goods. It revealed that the local refinery only supplies 50% of the fuel used each day, which supports the ongoing importation of gasoline to make up the difference.

Ogbugo Ukoha, the Executive Director of Distribution, Systems, Storage, and Retailing Infrastructure at NMDPRA, told reporters: “The daily PMS (Premium Motor Spirit) supply sufficiency was always more than 60 million before the current administration came in.”

Actually, the daily average for PMS is almost 66 million. And we immediately witnessed a sharp drop in consumption once Mr. President announced the termination of the subsidy on May 29, 2023. Plus or minus 50 million is what we’ve continued to accomplish since then.

Of these 50 million liters per day on average, domestic refineries supply less than half of that total. According to the Petroleum Industry Act (PIA), imports are the source of the shortfall. Just to be clear, I am stating that local refineries contribute less than 50% to sufficiency.

However, in February, Aliko Dangote, the president of Dangote Industries Limited (DIL), stated that his refinery has more than 500 million liters of gasoline and N600 billion worth of petroleum goods in storage.

This viewpoint was supported by Mr. Dan Kunle, a business consultant, who said that Nigeria’s ongoing reliance on imports could undermine recent gains in the naira’s stability.

All told, Nigeria imported 265.88 million liters of fuel and 701.75 million liters of gasoline in February 2025, according to the import data.

According to landing cost estimates as of February 20 from the Major Oil Marketers Association of Nigeria (MOMAN), the entire import bill for February is estimated to have been over N650.8 billion, while the diesel charge was over N278.5 billion.

The main ports of entry for the gasoline tanker vessels were Lagos, Port Harcourt, Calabar, and Warri.

Mele Kyari, the CEO of the NNPC Group, had declared that this year the business had not imported gasoline.

The rise in local refining production coincides with these noteworthy import numbers. According to reports, two of NNPC’s four refineries—in Warri and Port Harcourt—have started up again, while private refineries like Waltersmith, Aradel, and Dangote Refinery are also producing.

“The ongoing massive importation of refined petroleum products highlights structural bottlenecks in the industry, such as logistics difficulties, production scale-up issues, and supply chain inefficiencies, despite these encouraging developments,” Kunle said.

Accelerated refinery optimization, competitive local pricing structures, and strengthened regulatory frameworks to encourage domestic supply over expensive imports are necessary to reduce import dependence, he said.

Kunle emphasized that the naira’s recent gains could be undone by the ongoing wave of large-scale purchases denominated in dollars, further straining foreign exchange reserves.