Nigeria’s petrol imports surged in 2024, more than doubling despite increased domestic refining capacity, highlighting the country’s persistent reliance on imported fuel.
The latest foreign trade statistics report from the National Bureau of Statistics (NBS) revealed that petrol import costs rose by 105.3% to N15.42 trillion in 2024, up from N7.51 trillion in 2023.
This sharp increase came at a time when expectations were high for a decline in fuel imports, following significant investments in local refining.
What the data says
- Petrol import costs have followed a steep upward trajectory over the past five years, reflecting both increasing reliance on foreign supply and currency depreciation.
- In 2020, Nigeria spent N2.01 trillion on fuel imports. By 2021, this figure more than doubled, rising by 126.9% to N4.56 trillion, indicating a sharp increase in import dependence and global price fluctuations.
- The upward trend continued in 2022, with import costs jumping by 69.1% to N7.71 trillion, driven by rising crude oil prices and Nigeria’s inability to refine a significant portion of its fuel needs locally.
- In 2023, petrol import expenditure recorded a marginal decline of 2.6% to N7.51 trillion, suggesting a temporary easing, possibly due to factors such as forex adjustments and lower global oil prices.
- However, 2024 saw a 105.3% spike to N15.42 trillion, the highest on record. This dramatic surge can be attributed to the sharp 40.9% depreciation of the naira, which significantly inflated import costs in local currency terms, even if dollar-denominated prices remained relatively stable.
Import likely due to unmet domestic supply
Nigeria had anticipated a reduced reliance on imported fuel with the commencement of operations at the 650,000 barrels-per-day Dangote Refinery and the ongoing rehabilitation of state-owned refineries.
The Port Harcourt Refining Company (PHRC), with a total installed capacity of 210,000bpd, recently restarted operations at its old plant, which currently produces 60,000bpd.
However, available data suggests that domestic refining remains insufficient to meet national demand, necessitating continued large-scale imports.
Despite efforts to ramp up domestic refining capacity, Nigeria remains heavily reliant on imported fuel due to delays in refinery ramp-up, supply chain inefficiencies, and persistent demand-supply imbalances, among other factors.
The country’s vulnerability to foreign exchange fluctuations further complicates its ability to achieve energy self-sufficiency, as the rising cost of petrol imports continues to strain government finances and consumer purchasing power.
The persistent increase in fuel import bills affirms Nigeria’s continued vulnerability to foreign exchange volatility, global oil price fluctuations, and delays in achieving energy self-sufficiency through domestic refining.
What you should know
In December 2024, the Nigeria National Petroleum Company Limited (NNPCL) announced the restart of the 125,000 barrels per day (bpd) Warri Refinery and Petrochemical Company (WRPC), which was approved for rehabilitation in 2021 for $897 million.
- This announcement followed reports that the Port Harcourt refinery’s 60,000 bpd phase one had begun refining key fuels. Nigeria operates four national refineries: one in Kaduna, one in Warri, and two in Port Harcourt.
- The refurbishment of these refineries, in addition to the operations of the Dangote refinery, was expected to reduce Nigeria’s importation of petroleum products and make the country fuel-independent.
- However, the importation of refined products continues on a large scale despite the growing number of local refineries.