Nigeria’s petrol imports soared in 2024, more than doubling despite expanded domestic refining capacity, underscoring the nation’s continued dependence on imported fuel.
According to the latest foreign trade report from the National Bureau of Statistics (NBS), petrol import expenses surged by 105.3% to N15.42 trillion in 2024, up from N7.51 trillion in 2023
This significant rise occurred despite widespread expectations of reduced fuel imports following substantial investments in local refining.
Rising Petrol Import Costs: A Five-Year Trend
Over the past five years, Nigeria’s expenditure on petrol imports has surged, driven by increasing reliance on foreign supply and the depreciation of the naira.
In 2020, the country spent N2.01 trillion on fuel imports. This amount more than doubled in 2021, rising by 126.9% to N4.56 trillion, reflecting heightened import dependence and fluctuations in global oil prices.
Nigeria’s Petrol
The upward trajectory persisted in 2022, with import costs soaring by 69.1% to N7.71 trillion, largely due to rising crude oil prices and Nigeria’s limited local refining capacity.
A slight relief came in 2023 when petrol import expenses dipped by 2.6% to N7.51 trillion, possibly influenced by forex adjustments and lower international oil prices.
However, 2024 saw a dramatic surge of 105.3% to N15.42 trillion, marking the highest import bill on record. This sharp increase was primarily driven by a 40.9% depreciation of the naira, which significantly inflated costs in local currency, despite relatively stable dollar-denominated prices.
Domestic Supply Challenges Sustain Fuel Imports
Nigeria had anticipated a decline in fuel imports with the launch of operations at the 650,000 barrels-per-day (bpd) Dangote Refinery and the ongoing rehabilitation of state-owned refineries.
The Port Harcourt Refining Company (PHRC), which has an installed capacity of 210,000 bpd, recently restarted production at its older plant, currently refining 60,000 bpd.
However, available data indicates that domestic output remains insufficient to meet national demand, necessitating continued reliance on large-scale fuel imports.
Despite efforts to enhance domestic refining capacity, Nigeria remains heavily dependent on imported petrol due to delays in refinery ramp-ups, supply chain inefficiencies, and persistent demand-supply imbalances.
Additionally, the country’s exposure to foreign exchange fluctuations further complicates efforts to achieve energy self-sufficiency, as rising import costs continue to strain government finances and consumer purchasing power.
The steady increase in fuel import expenditures highlights Nigeria’s ongoing vulnerability to currency volatility, global oil price changes, and setbacks in achieving full domestic refining capacity.
Key Developments to Note
In December 2024, the Nigerian National Petroleum Company Limited (NNPCL) announced the restart of operations at the 125,000 bpd Warri Refinery and Petrochemical Company (WRPC), which had been approved for a $897 million rehabilitation in 2021.
This followed reports that the first phase of the Port Harcourt Refinery, producing 60,000 bpd, had commenced refining key petroleum products.
Nigeria operates four state-owned refineries—one in Kaduna, one in Warri, and two in Port Harcourt. The refurbishment of these facilities, along with the Dangote Refinery’s operations, was expected to curb petroleum imports and position the country for fuel self-sufficiency.
However, despite the growing number of operational refineries, Nigeria continues to import refined products on a significant scale, underscoring persistent challenges in the energy sector.
Explore Naijaecho.com.ng For More News Update