Despite being Africa’s largest crude oil producer, it is paradoxical that Nigeria imported crude oil worth N1.19 trillion from other countries in the first quarter 2025 due to poor domestic supply to local refineries in the country. This development is contained in the recent ’Foreign Trade in Goods’ figures released by the National Bureau of Statistics (NBS). According to the statistics, imported crude has become Nigeria’s third most imported petroleum product within the period under review.
The product accounts for 7.7 per cent of total imports, trailing only gas and motor spirits (popularly known as petrol). The value of the import between January and March 2025 was put at N1.83trillion and N1.76trillion, respectively. The NBS report also shows that the United States (US) is the dominant source of crude oil imported by Nigerian refineries, estimated at N736.8billion. This represents 61 per cent of the total imports into Nigeria within the Q1 2025.
Crude oil imports from Angola and Algeria stood at N223.58 billion and N122.37billion, respectively. Together, the United States, Angola and Algeria account for the largest crude oil imports in the country in recent months. No doubt, this is an indication that local refineries in the country rely heavily on foreign sourced feedstock due to insufficient domestic supply.
It also shows that local refineries, including modular refineries and large-scale petroleum facilities like the 650,000 per day Dangote Refinery, have little or no option but to turn to international markets for a more reliable crude supply. The immediate consequence is high cost of petrol and diesel in the country. The situation reflects a wider systemic failure in aligning domestic crude production with refining demands.
A closer analysis of crude oil imports in the Q1 2025 showed that gas oil, petrol and diesel imported from abroad peaked at N4.78trillion, representing over 30 per cent of total imports for the quarter in review. Overall, Nigeria’s total imports within the period represents an increase of 4.59 per cent compared to the same period in 2024, but a decline of 7 per cent from that of Q4 2024. The bad news is that Nigeria’s dependence on imported petroleum products remains something of serious concern, with refined and unrefined petroleum products dominating Nigeria’s import bills, which increased by 63 per cent in the past one year.
Recently, President of Dangote Refinery and Africa’s richest man, Aliko Dangote, admitted that the $200 billion Refinery “is increasing relying on the United States for its crude oil import.” The Refinery, which was commissioned last year, is projected to import a total of 17.65 million barrels of crude between April and July this year. This includes the 3.6 million barrels already delivered between April and May 2025. It also comes amid the ongoing crude allocations under the federal government’s ‘naira-for-crude’ policy.
The policy allows local refineries to purchase crude in naira instead of the US dollar. Besides, the deal, structured on a 6-month basis with the Nigerian National Petroleum Company Limited (NNPCL), “subject to availability”, was designed not only to support local refining capacity, reduce the over-reliance on imported petroleum products, but also ease the pressure on foreign exchange reserves, and stabilise the value of the naira. Statistics from the Central Bank of Nigeria (CBN) show that Nigeria’s foreign reserves experienced some decline in recent months.
The ‘naira-for-crude’ policy, which came under threat as a result of disagreement between NNPCL and the Dangote Refinery, was restored by the intervention of the federal government. When the policy began, NNPCL was supplying Dangote Refinery 300,000 barrels per day before the disagreement set in, with NNPCL management contending that it had “other commitments” with other partners it signed forward contracts with, to buy and sell petroleum products at predetermined price rate on a future date. The policy should not be allowed to collapse, as it will help local refineries sell fuel and diesel in the domestic market and reduce the cost of imported crude in the Nigerian market.
We believe that Nigeria can significantly reduce the high imports of crude if it can prioritise the revitalisation of domestic refineries, invest heavily in alternative energy sources, enhance fuel efficiency, and strengthen regulations in the oil and gas sector. By focusing on these areas, and checking corruption, the country can lessen the current over-reliance on imported refined petroleum products. These measures should also have the buy-in of the private sector investors.
We call for huge investment in public transportation infrastructure as Dangote Group has just started doing. In fact, with good collaboration with the private sector, and mutual understanding, the Dangote Refinery can meet domestic demand, and substantially reduce the high import bill that is draining the nation’s foreign reserves.