Nigeria’s spending on the importation of refined petroleum products has fallen sharply by 54 per cent in two years, dropping from $14.58bn in the first nine months of 2023 to $6.71bn in the same period of 2025, according to figures from the Central Bank of Nigeria (CBN) Balance of Payments report.
The data show that fuel import spending declined from $14.58bn between January and September 2023 to $11.38bn in the corresponding period of 2024, before plunging further to $6.71bn in the first nine months of 2025.
This is based on a comparative analysis of the 2023 and 2024 full-year figures and the Q3 2025 Balance of Payments presentation released by the CBN and reviewed by Dip Connect Online News.
The figures indicate a sustained moderation in fuel imports, with year-on-year declines over the period under review. Nigeria spent $11.38bn on refined petroleum imports between January and September 2024, representing a $3.20bn or 21.9 per cent drop from the $14.58bn recorded in the same period of 2023.
The decline accelerated in 2025, as fuel imports fell by $4.67bn or 41 per cent to $6.71bn, marking the steepest year-on-year contraction in the period analysed.
Overall, Nigeria spent $7.87bn less on refined fuel imports in the first nine months of 2025 compared to the same period in 2023, reflecting a major easing of foreign exchange outflows linked to petroleum product imports. The CBN data also showed a 41 per cent year-on-year drop in refined petroleum product imports by the third quarter of 2025, signalling early signs of import substitution as new and rehabilitated refineries increase production.
Dip Connect Online News reports that the reduction in foreign exchange spending on fuel imports follows a series of structural reforms and market adjustments aimed at easing pressure on Nigeria’s external reserves and stabilising the naira.
For decades, Nigeria depended heavily on imported refined petroleum products due to limited domestic capacity, weak industrial output and chronic underinvestment in infrastructure, making fuel imports one of the biggest drains on foreign exchange.
The removal of petrol subsidies in 2023 marked a turning point, as higher pump prices reduced consumption and curtailed arbitrage-driven demand. Combined with stricter foreign exchange management by the CBN, the policy shift helped reduce import volumes and speculative FX demand linked to fuel imports.
Another major factor has been the gradual expansion of domestic supply, particularly in the downstream oil sector. Energy experts also point to intensified competition as marketers increasingly contend with supplies from the $20bn Dangote Petroleum Refinery in Lekki.
Despite the sharp decline, marketers still spent about $6.71bn importing refined petroleum products during the review period, highlighting Nigeria’s continued dependence on foreign fuel, even as domestic refining expands. The data also show that while the import bill has declined steadily, structural weaknesses remain in the downstream oil sector.
Commenting on the trend, energy economist Prof. Wumi Iledare said Nigeria’s reliance on imported petrol has reduced but not ended. He cautioned against claims that fuel imports have stopped entirely following increased domestic output from the Dangote Refinery.
In a personal note titled “Dangote Refinery, Petrol Imports, and Market Reality,” Iledare said recent assertions that Nigeria no longer imports petrol reflect “understandable optimism” but overstate the realities of the market.
He explained that although the Dangote Refinery has significantly improved domestic supply and reduced marginal dependence on imports, neither the refinery nor petroleum marketers determine national supply outcomes. According to him, Nigeria’s downstream petrol market operates within an oligopolistic, import-parity–anchored framework, where prices and supply stability are shaped by the option to import rather than the physical arrival of fuel cargoes.
“Even when no petrol cargoes are landing, the credible threat of imports remains the market anchor. Importation also continues to serve as a risk-management tool for stock security, demand surges, logistics disruptions and refinery operational risks,” he said.
Iledare added that the Petroleum Industry Act (PIA) entrenches liberalisation and competition in the downstream sector and does not allow discretionary declarations that fuel imports have ended.
“Sustainable price stability and energy security arise from market discipline, infrastructure efficiency, foreign exchange liquidity and regulatory credibility, not announcements,” he said, stressing that policy narratives should focus on reduced marginal import dependence, not total import elimination.
Similarly, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, described the development as a major shift in Nigeria’s downstream oil market, driven by the growing impact of local refining.
Elijah Adeyemi
