A long-standing reliance on imported petrol eased in 2025, as Nigeria’s total import expenditure declined to N8.96 trillion, driven by increased domestic refining activity led by the Dangote Refinery, which is reshaping the downstream oil sector.
Latest foreign trade data released by the National Bureau of Statistics (NBS) indicates that petrol import spending declined by N6.46 trillion, or 41.9 per cent, from N15.42 trillion recorded in 2024. The contraction reflects a gradual shift toward local supply, following years of heavy reliance on foreign refined fuel.
Despite the significant year-on-year drop, petrol imports in 2025 remained about N1.45 trillion, or 19.3 per cent, higher than the N7.51 trillion recorded in 2023, the year Nigeria removed fuel subsidies. This indicates that while domestic refining capacity is expanding, structural supply gaps persist.
Leading the domestic production drive is the Dangote Refinery, which has ramped up production to 50 million litres of petrol per day as of early 2026. The facility, widely seen as a game-changer for Nigeria’s energy security, is also targeting a longer-term capacity of 1.4 million barrels per day through phased expansion.
Industry analysts say the refinery’s increasing output is beginning to displace imports, but not at a pace sufficient to fully meet national demand. According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), total petrol consumption stood at 18.97 billion litres in 2025. Of this, 11.85 billion litres, representing 62.47 per cent, were still sourced from imports, while domestic refineries supplied 7.54 billion litres, or 37.53 per cent.
The persistence of imports has also sparked tensions within the industry. Aliko Dangote, promoter of the Dangote Refinery, has openly criticised the regulator for continuing to issue import licences for petroleum products, including petrol and diesel, despite rising domestic production capacity.
Dangote argues that ongoing importation is undermining local refining efforts and distorting market dynamics. He has also raised concerns about the quality of some imported fuels, alleging that high-sulphur diesel products entering the Nigerian market could have negative economic and environmental consequences.
In response, the NMDPRA announced in March 2026 that it had suspended the issuance of new petrol import licences, citing improved local supply conditions. The regulator noted that the Dangote Refinery alone accounted for 92 per cent of domestic petrol supply in February 2026, signalling a major shift in market structure.
Nonetheless, Dangote maintains that previously issued licences are still being utilised by importers, leading to what he describes as “back-loading”, a practice where imported products continue to enter the market despite sufficient local supply. This, he argues, creates artificial competition and limits the ability of domestic refiners to fully optimise capacity.
Beyond regulatory tensions, pricing dynamics also remain a critical issue. Despite increasing output, the Dangote Refinery has implemented several price adjustments, driven largely by the high cost of crude oil inputs. In some cases, crude prices have exceeded Brent benchmarks, placing upward pressure on refined product prices and complicating efforts to stabilise the domestic fuel market.
For consumers and businesses, this means that while Nigeria is producing more of its own fuel, the expected price relief has yet to fully materialise. Instead, the market is adjusting to a new equilibrium where local production coexists with global price influences.
