Nigeria Spends N930bn on Fuel Imports in February Despite Rising Local Refining Capacity
Nigeria imported petrol and diesel in February 2025 valued at about N930 billion, despite rising local refining capacity, raising questions as to the economic sense behind the licensing of oil marketers to bring in fresh petroleum products. Data on the importation of the fuels last month, showed that aside from the N930 billion bill in February, oil marketers licensed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), imported products worth N5.5 trillion between October 2024 and January this year. However, this development is taking place despite the growing capacity of the Dangote Refinery as well as the Port Harcourt Refinery owned by the Nigerian National Petroleum Company (NNPC). Both refineries produce petrol. In addition, the Warri Refinery as well as other modular refineries scattered mostly in the Niger Delta, refine diesel locally. In February this year, the petroleum products import licensing body, the NMDPRA, argued that it had continued to approve oil marketers to bring in products, to address shortfalls in the country. It disclosed that the local refinery only meets 50 per cent of daily fuel consumption, justifying the continued importation of petrol to meet the deficit. Executive Director of Distribution, Systems, Storage, and Retailing Infrastructure of NMDPRA, Ogbugo Ukoha, told journalists: “Just before the current administration came in, the daily PMS (Premium Motor Spirit) supply sufficiency was always more than 60 million. “In fact, averaging about 66 million a day for PMS. And following Mr. President’s withdrawal of subsidy, the announcement of May 29th, 2023, we immediately saw a steep decline in consumption. And between then and as we speak, we’ve continued to do plus or minus 50 million. “Of these 50 million litres averaging for each day, less than 50 per cent of that is contributed by domestic refineries. And so the shortfall in accordance with the Petroleum Industry Act (PIA) is sourced by way of imports. So just for clarity, what I’m saying is that the contribution of local refineries towards the sufficiency is less than 50 per cent.” But President of Dangote Industries Limited (DIL), Aliko Dangote, also speaking in February, said that his refinery holds over 500 million litres of petrol and N600 billion worth of total petroleum products in stock. A Business Consultant, Mr Dan Kunle, agreed with this position, stating that the sustained import dependency by Nigeria could erode recent gains in the stability of the naira. In all, the import data for February 2025 indicated that Nigeria brought in 701.75 million litres of petrol and 265.88 million litres of diesel during that month. Based on landing cost estimates from the Major Oil Marketers Association of Nigeria (MOMAN) as of February 20, the total import bill in February is believed to have exceeded N650.8 billion, while diesel amounted to over N278.5 billion. The fuel tanker vessels came mainly through Lagos and Port Harcourt, Calabar, and Warri ports. The NNPC Group CEO, Mele Kyari had stated that the company had not imported petrol this year. “These significant import figures come at a time when local refining output is increasing. Two of NNPC’s four refineries, in Warri and Port Harcourt, have reportedly resumed operations, while private refineries such as Dangote Refinery, Waltersmith, and Aradel are actively producing. “Despite these positive developments, the continued large-scale importation of refined petroleum products underscores structural bottlenecks in the industry, including logistics challenges, production scale-up issues, and supply chain inefficiencies,” Kunle explained. According to him, reducing import reliance will require accelerated refinery optimisation, competitive local pricing structures, and strengthened regulatory frameworks to incentivise domestic supply over costly imports. Kunle stressed that the continued large-scale dollar-denominated imports could reverse these gains that the naira garnered in the last few months, putting additional pressure on foreign exchange reserves.
Admin | 2025-03-10 08:36:53