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Two-year refining milestone: Fuel import spending crashes 54% to $6.7bn

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The amount spent on the importation of refined petroleum products has dropped sharply by 54 per cent in two years, falling from $14.58bn in the first nine months of 2023 to $6.71bn in the corresponding period of 2025, according to data from the Central Bank of Nigeria’s Balance of Payments report.

It declined from $14.58bn in the first nine months of 2023 to $11.38bn in the corresponding period of 2024, before dropping further to $6.71bn within nine months of 2025.

This is according to a comparative analysis of the 2023 and 2024 full-year and the Q3 2025 Balance of Payments presentation, released by the CBN and reviewed by The PUNCH on Monday.

The figures obtained from the CBN documents showed a sustained moderation in fuel importation, with import bills declining year-on-year over the period under review.

The data revealed that Nigeria spent $11.38bn on refined petroleum product imports between January and September 2024, representing a $3.20bn or 21.9 per cent decline compared with $14.58bn recorded in the same period of 2023, pointing to a sharp contraction in foreign exchange outflows associated with refined petroleum products.

The downward trend accelerated in 2025, with fuel imports dropping further by $4.67bn, or 41 per cent, to $6.71bn within the first nine months of the year, marking the steepest year-on-year contraction in the period analysed.

Overall, the figures show that Nigeria spent $7.87bn less on refined fuel imports in the first nine months of 2025 than it did in the corresponding period of 2023, underscoring a significant easing of foreign exchange outflows linked to petroleum product imports.

The CBN data also showed a 41 per cent year-on-year decline in refined petroleum product imports by the third quarter of 2025, signalling early signs of import substitution as new and rehabilitated refineries scale up operations.

The PUNCH reports that Nigeria’s reduced foreign exchange spending on imports comes against the backdrop of a series of structural reforms and market adjustments aimed at easing pressure on the country’s external reserves and stabilising the naira.

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For decades, Nigeria relied heavily on imports, particularly refined petroleum products, due to limited domestic productive capacity, weak industrial output, and chronic underinvestment in critical infrastructure. This dependence made import financing one of the largest drains on foreign exchange earnings.

The removal of petrol subsidies in 2023 marked a major turning point, as higher pump prices curbed fuel consumption and reduced arbitrage-driven demand. The policy shift, combined with stricter foreign exchange management by the Central Bank of Nigeria, helped moderate import volumes and limit speculative FX demand linked to fuel importation.

Another key factor has been the gradual expansion of domestic supply, especially in the downstream oil sector. Energy experts also say competition within the market has intensified as marketers struggle to compete with supply from the $20bn Dangote Petroleum Refinery in Lekki.

Despite the decline, Nigerian fuel-importing marketers still spent an estimated $6.71bn importing refined products during the review period, underscoring the country’s continued dependence on foreign fuel supplies, despite repeated assurances that domestic refining would significantly curb imports.

Although the quarterly fuel import bill declined consistently, the data highlighted persistent structural weaknesses in the downstream oil sector.

Experts speak

Commenting, renowned energy economist Professor Wumi Iledare, noted that Nigeria’s reliance on imported petrol has declined but has not been eliminated. He also warned against claims that fuel importation has ended following increased domestic supply from the Dangote Petroleum 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 economic reality of the downstream oil market.

“Recent claims that petrol importation into Nigeria has ended because Dangote Refinery now meets domestic demand reflect understandable optimism, but they overstate economic reality.

“Dangote Refinery has significantly improved domestic supply conditions and reduced Nigeria’s marginal reliance on imported petrol. However, neither Dangote Refinery nor petroleum marketers determine national supply outcomes,” he said.

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Iledare, who also serves as Executive Director of the Emmanuel Egbogah Foundation, Abuja, acknowledged that the Dangote Refinery has significantly improved domestic supply conditions and reduced Nigeria’s marginal dependence on imported petrol.

However, he stressed that neither the refinery nor petroleum marketers determines 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 presence of imported cargoes.

“Nigeria’s downstream petrol market operates within an oligopolistic, import-parity–anchored framework, where prices and supply stability are disciplined by the option to import, not merely the act of importing.

“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,” Iledare said, adding that importation continues to function as a risk-management tool for stock security, demand surges, logistics disruptions and refinery operational risks.

The energy economist further noted that the Petroleum Industry Act entrenches liberalisation and competition in the downstream sector, leaving no room for discretionary declarations that petrol imports have ended.

“The PIA does not permit discretionary declarations that 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.

Iledare argued that the appropriate policy narrative should focus on reduced marginal import dependence, rather than import elimination, warning that imprecise language could undermine policy credibility.

“The correct policy framing, therefore, is reduced marginal import dependence, not import elimination. Precision in language matters, because credibility in energy policy is built on economic fundamentals, not celebratory headlines,” he added.

Also speaking on the subject, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, described the development as a major shift in Nigeria’s downstream oil market, citing the growing impact of local refining.

“That’s a significant drop. A 54 per cent reduction in fuel import spending in just two years signals increased local production, largely championed by the Dangote Petroleum Refinery,” Olatide said.

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He noted that the refinery’s reported supply of over 50 million litres of petroleum products daily into the Nigerian market aligns with recent Central Bank of Nigeria data, which show a sharp moderation in refined fuel imports.

According to him, the combination of expanding local refining capacity and residual imports is gradually strengthening Nigeria’s energy security.

“The 50 million litres daily supply of petroleum products into the Nigerian market, according to Dangote Refinery, correlates with the CBN reports. Nigeria is gradually becoming an energy secure country with the combination of local refining and imports,” Olatide asserted.

Further analysis

Further analysis of the quarterly data from the BoP report showed that refined fuel imports stood at $3.26bn in Q1 2025, before declining to $1.80bn in Q2 and $1.65bn in Q3, reflecting a steady moderation across the year.

However, Nigeria’s overall import bill continued to rise during the period. Total imports increased from $9.20bn in Q1 to $9.62bn in Q2 and $10.30bn in Q3, driven largely by non-oil imports, which climbed to $7.08bn in the third quarter.

On the export side, earnings from crude oil, gas, and refined petroleum products improved, rising to $13.05bn in Q3 from $11.25bn in Q1, supported mainly by crude oil exports, which stood at $8.45bn in the third quarter.

Gas exports, however, fell sharply, declining by 30.21 per cent quarter-on-quarter and 20.07 per cent year-on-year, due to infrastructure constraints and global market pressures.

The sustained spending on refined fuel imports comes amid the Federal Government’s long-standing push for energy self-sufficiency.

While recent data suggest that fuel imports are beginning to moderate, analysts say Nigeria’s transition to full self-sufficiency will remain incomplete until domestic refineries operate consistently at scale and meet local demand.

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Read how Nigerians tap savings, loans to buy Dangote refinery shares

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Some Nigerians seeking to invest in the Dangote Petroleum Refinery and Petrochemicals FZE Initial Public Offering have turned to personal savings, loans and proceeds from the sale of assets to raise funds to buy shares, Saturday PUNCH has learnt.

Findings by our correspondents revealed strong interest in the shares among prospective retail investors, some of whom said they expected the investment to yield substantial returns in the future.

While some respondents said they were dipping into savings or raising funds through other means, others said the prevailing economic hardship had made it difficult for them to participate in the offer.

The refinery opened its IPO on Monday, September 14, giving Nigerians an opportunity to own equity in the company.

The offer comprises 4.1 billion ordinary shares priced at N525 each, with the company targeting about N2.15tn to part-fund an expansion that would nearly double the refinery’s capacity to 1.4 million barrels per day.

The minimum subscription is 10 shares, costing N5,250.

Dangote Group Chief Executive Officer, Aliko Dangote, said the low entry threshold was deliberately set to allow ordinary workers, including drivers, cooks and domestic staff, to become shareholders, describing the offer as “the IPO for the people.”

The offer is expected to close on October 13.

Investors turn to savings, loans

A staff member of the Federal Ministry of Works, David Adelabu, described the shares as expensive for struggling civil servants but said he considered the offer an opportunity to become a shareholder in the refinery.

He said, “I have small shares in some companies, including Glo and MTN, but Dangote’s shares will be the highest I will be buying. It is on the high side, but I feel this is an opportunity to become a shareholder in Dangote.

“I understand that the dividends are not going to be immediate, but I don’t mind even if it will entail selling a plot of land I have in Metumbi here in Minna. I will gladly do so.”

A trader in Dutse, Jigawa State, Adamu Bala, said he planned to use savings from his business to buy the shares.

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“I will not sell my house. I will use a small profit from my shop to buy,” he said.

Similarly, a civil servant, Fatima Mannir, said women in her group had started raising money through contributions, known as adashe, to participate in the offer.

“We have started raising money through adashe,” she said.

A trader in Damaturu, Yobe State, Malam Musa Ibrahim, said he invested part of his business savings after learning about the offer.

“I am using part of the money I have saved from my business.

“I believe that if I can invest a small amount now, it may become useful to me in the future. But I am also being careful because business is not easy at the moment,” he said.

Another resident, Aisha Mohammed, said she raised money by cutting down on some household expenses.

“I did not borrow money to buy the shares. I have been saving little by little, and when I heard about the offer, I decided to use part of what I had saved,” she said.

A businessman, Abdullahi Yusuf, however, said he obtained financial assistance from a friend to increase his subscription.

“I wanted to buy more shares than what my savings could afford, so I discussed it with a friend who agreed to lend me some money.

“I know that borrowing money to invest carries risks, but I am hoping that the investment will perform well. I will repay the money from my business income,” he said.

A petty trader, Hauwa Lawan, said she sold some personal belongings she no longer used and added the proceeds to her savings to finance her purchase.

“I sold some things that I was no longer using and added the money to my savings,” she said.

A farmer, Mallam Abdullahi Adamu, said he sold farm produce to raise about N500,000 to invest in the shares.

In Kano State, an investor, Abdulmalik Ibrahim, said he bought 10 shares for N5,250 using personal funds.

Hardship keeps some investors away

While some Nigerians are finding ways to participate in the IPO, others said economic pressures had put the investment beyond their reach.

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A civil servant in Kogi State, Saliu Joseph, said he would have loved to invest but had just paid his children’s school fees.

“Right now, I don’t think I can afford to participate unless a miracle happens,” he said.

A retired permanent secretary in the state, Bola Boro, also said he would not participate because he could not afford the investment at the moment.

“As a retired civil servant, I cannot afford such an amount to invest in the offer. Even though I am a fan of investment through the stock market, which I have been doing for years, I don’t think it will be convenient for me to participate considering the time frame of just one month,” he said.

A civil servant, Kuta Abdulahi, said the financial demands of his children’s education had left him unable to participate in the share offer.

“I must tell you the truth, I know about the Dangote Refinery shares, but I cannot even think of it at this time. My children are just resuming a new term in school. Where will I get the money for their school fees before thinking of buying shares? Please, I have a lot on my head,” he said.

Similarly, a vulcaniser, Ahmed Alkali, said his income was barely enough to meet his family’s basic needs, making investment in shares difficult.

“With the kind of job I do, I am working from hand to mouth. So, how can I buy shares when I have not eaten?” he asked.

Experts warn against borrowing

Investment experts, however, cautioned Nigerians against taking loans, selling properties or committing all their savings to the IPO, warning that equity investments carry risks.

Speaking with Saturday PUNCH, the Group Managing Director of Lancelot Group, Adebayo Adeleke, urged prospective investors to understand the risks associated with the capital market before committing their funds to the IPO.

Adeleke, who is also a former Secretary of the Independent Shareholders Association of Nigeria, said capital market investments should be made with funds that investors could afford to leave untouched for the long term, noting that equities were unsuitable for people struggling to meet immediate financial needs.

He said, “When you buy shares, you are buying a portion of the ownership of the business. Investment takes a lot of time to pass through gestation, to stability, to profitability. And you cannot, with any degree of certainty, predict when the company is going to turn the corner and begin to produce profits.

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“So, investment money is not the money you are likely to need in the next two months, three months, six months, even one year. If you cannot part with your money for a minimum of three to five years, the capital market is not the place to invest.”

Adeleke, however, described the IPO as a strategic investment, citing the refinery’s scale and demand for its products.

Also speaking, the Head of Financial Institutions Ratings at Agusto & Co., Ayokunle Olubunmi, urged Nigerians to consider the risks associated with the investment and avoid committing all their savings to the offer.

He said, “There are plenty of risks to this business. It’s not risk-free. Things can get worse for the business. Valuation is based on expectations of what will happen in the future. Things might not go as planned. And, like we all know, equity is a risky business.”

Olubunmi particularly cautioned prospective investors against selling property or using up all their savings to invest in the offer.

He advised them to invest only a portion of their funds and diversify their portfolios.

The expert also advised those considering taking loans to buy the shares to have a separate and reliable repayment plan rather than depending on returns from the investment.

The Emir of Kano, Muhammadu Sanusi II, had earlier warned prospective investors against using their children’s school fees or selling their homes to invest in the shares.

Sanusi, who gave the warning on Thursday while speaking at the company’s roadshow in Kano, urged prospective investors to invest only money they could afford to set aside for some time, suggesting amounts such as N10,000, N20,000 or N30,000.

Source: punchng.com

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ARE NIGERIANS BUILDING CHINA’S ECONOMY WHILE NEGLECTING THEIR OWN?

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While other nations are busy producing, manufacturing and exporting, Nigeria must ask itself a difficult question: Are we building our own economy, or simply creating a bigger market for other countries?

Nigeria has a huge population, abundant natural resources and a massive consumer market. Yet the country continues to depend heavily on imported finished products—from electronics and clothing to machinery, household goods and other consumer items.

The issue is not simply about Chinese businesses or businesses from any other foreign country operating in Nigeria. Foreign investment can bring capital, technology, jobs and expertise.

The bigger issue is whether **Nigerian businesses are being given the opportunity and support to manufacture competitively at home.

Instead of remaining primarily a consumer of finished products, Nigeria needs to strengthen its manufacturing sector and move further up the value chain.

Nigeria needs to produce, not just consume.

A stronger manufacturing economy could help Nigeria:

* Create more jobs for Nigerians
* Add value to locally available raw materials
* Develop industrial skills and technology
* Reduce excessive dependence on imported finished goods
* Build competitive Nigerian companies
* Increase the country’s ability to export

The goal should not be to drive legitimate foreign businesses out of Nigeria. The goal should be to build an economy where **Nigerian manufacturers can compete, grow and eventually take Nigerian-made products to markets around the world.

The question Nigerians should be asking is simple:

**Why should Nigeria remain one of the world’s biggest markets for finished products when we have the potential to manufacture many of them ourselves?

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🇳🇬 **Nigeria must move from being predominantly a consumer nation to becoming a stronger producer, manufacturer and exporter.

What do you think?

Which products should Nigeria prioritize for local manufacturing instead of relying heavily on imports?

Share your thoughts in the comments.

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ICRC defends toll pricing on highways

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The Infrastructure Concession Regulatory Commission has defended the toll pricing structure under the Highway Development and Management Initiative, saying charges are evaluated against the quality and benefits of the upgraded roads.

In a statement made available to PUNCH Online on Thursday, the Director-General, Dr. Jobson Ewalefoh, cited the 227-kilometre Akwanga–Makurdi road corridor as an example.

He said the route has four toll gates, and motorists pay as they travel along it.

He argued that toll payments should be viewed against the previous costs imposed by the poor condition of the road, including lost man-hours, vehicle damage and accident risks.

Feedback from road users, he said, shows many motorists are willing to pay tolls where they see clear improvements in road quality.

Some drivers have expressed support for similar arrangements on other major corridors if the roads are upgraded to the same standard.

“That, to me, is the beauty of a well-structured PPP,” Ewalefoh said.

He explained that negotiators carefully consider toll pricing to keep charges fair. A portion of the revenue is set aside specifically for road maintenance. Under the concession agreements, the government does not bear additional maintenance costs for the duration of the contract.

The government must repair potholes within 48 hours, and it funds major routine repairs from the dedicated toll revenue.

Source: punchng.com

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