Nigeria’s spending on imported refined petroleum products declined sharply by 54% over 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 (CBN) Balance of Payments report.
A comparative analysis of the CBN’s 2023 and 2024 full-year reports and the Q3 2025 Balance of Payments presentation shows a sustained year-on-year moderation in fuel importation costs, signalling a significant easing of foreign exchange outflows linked to petroleum product imports.
The data indicate that Nigeria spent $14.58bn on refined fuel imports between January and September 2023. This figure declined to $11.38bn in the same period of 2024, representing a reduction of $3.20bn, or 21.9 per cent. The downward trend accelerated in 2025, with imports falling further by $4.67bn, or 41 per cent, to $6.71bn within the first nine months of the year—the steepest annual contraction recorded during the period under review.
Overall, Nigeria spent $7.87bn less on refined fuel imports in the first nine months of 2025 compared with the corresponding period of 2023, underscoring a substantial reduction in foreign exchange demand from the downstream petroleum sector.
The CBN data also showed a 41 per cent year-on-year decline in refined petroleum product imports by the third quarter of 2025, pointing to early signs of import substitution as new and rehabilitated refineries gradually scale up operations.
Contributing Factors
Nigeria’s reduced foreign exchange spending on fuel imports comes amid a series of structural reforms and market adjustments aimed at easing pressure on external reserves and stabilising the naira. For decades, the country relied heavily on imports—particularly refined petroleum products—due to limited domestic refining capacity, weak industrial output, and chronic underinvestment in critical infrastructure. As a result, fuel imports became one of the largest drains on foreign exchange earnings.
The removal of petrol subsidies in 2023 marked a major policy shift, as higher pump prices curbed consumption and reduced arbitrage-driven demand. The reform, combined with tighter foreign exchange management by the CBN, helped moderate import volumes and limit speculative FX demand linked to fuel importation.
Another contributing factor has been the gradual expansion of domestic supply, particularly in the downstream oil sector. Industry analysts note that competition has intensified as marketers increasingly struggle to compete with supplies from the $20bn Dangote Petroleum Refinery in Lekki.
Despite the sharp decline, fuel-importing marketers still spent an estimated $6.71bn on refined petroleum products during the review period, highlighting Nigeria’s continued dependence on foreign fuel supplies, notwithstanding repeated assurances that domestic refining would significantly curtail imports.
While the quarterly import bill has fallen consistently, the data also point to persistent structural weaknesses in the downstream sector, suggesting that sustained policy discipline and further investment will be required to achieve long-term energy self-sufficiency.
