Nigeria’s continued reliance on imported gasoline is highlighted by its petrol imports, which more than doubled in 2024 despite an increase in domestic refining capacity.
According to the National Bureau of Statistics (NBS) most recent foreign trade statistics report, the cost of importing petrol increased by 105.3% from N7.51 trillion in 2023 to N15.42 trillion in 2024.
After large expenditures in domestic refining, there were great expectations for a drop in gasoline imports during this dramatic spike.
What The Data Indicates
- Over the last five years, the cost of importing petrol has sharply increased, reflecting both a growing reliance on foreign supplies and currency devaluation.
- Nigeria imported fuel for N2.01 trillion in 2020. This number more than doubled by 2021, increasing by 126.9% to N4.56 trillion, demonstrating a significant rise in reliance on imports and volatility in world prices.
- In 2022, the upward trend persisted as Nigeria’s incapacity to process a sizable amount of its fuel needs domestically and rising crude oil prices caused import expenditures to soar by 69.1% to N7.71 trillion.
- Petrol import spending fell 2.6% to N7.51 trillion in 2023, indicating a brief relaxation that lower global oil prices and currency fluctuations may have brought on.
- The greatest amount on record, N15.42 trillion, was reached in 2024, a 105.3% increase. This extreme increase can be ascribed to the naira’s sudden 40.9% depreciation, which greatly increased import expenses in local currency terms even in the case of relatively stable dollar-denominated prices.
Import Is Likely Due To Unfulfilled Domestic Supply
Nigeria had hoped that operations at the 650,000 barrels per day Dangote Refinery and the continuous renovation of state-owned refineries would lessen its dependency on imported fuel.
The Port Harcourt Refining Company (PHRC) recently reopened its old plant, which currently produces 60,000 barrels per day and has a total installed capacity of 210,000 barrels per day.
However, the data that is now available indicates that domestic refining is still insufficient to meet national demand, requiring the continuation of significant imports.
Nigeria is still largely dependent on imported fuel despite efforts to increase its local refining capacity. This is because of several issues, including supply chain inefficiencies, ongoing demand-supply mismatches, and delays in refinery ramp-up.
Since the rising cost of fuel imports continues to strain government budgets and consumer purchasing power, the nation’s susceptibility to swings in foreign exchange further hampers its efforts to achieve energy self-sufficiency.
The ongoing rise in gasoline import prices confirms Nigeria’s susceptibility to fluctuations in foreign exchange rates, changes in the price of oil globally, and setbacks in reaching energy self-sufficiency through domestic refining.
What To Note
The 125,000 barrels per day (bpd) Warri Refinery and Petrochemical Company (WRPC), which was authorized for restoration in 2021 for $897 million, will resume operations, according to a December 2024 announcement from the Nigeria National Petroleum Company Limited (NNPCL).
- This statement was preceded by reports that the 60,000 bpd phase one refinery at Port Harcourt had started processing essential fuels. Nigeria runs four national refineries: two in Port Harcourt, one in Warri, and one in Kaduna.
- The renovation of these refineries and the Dangote refinery was anticipated to make Nigeria fuel-independent and reduce its import of petroleum products.
- Nevertheless, even if domestic refineries are increasing, many refined products are still imported.
