Nigeria’s petrol import bill plunged to N1.76 trillion in the first quarter of 2025, a sharp 54% drop from N3.81 trillion recorded in the same period last year, according to new foreign trade data released by the National Bureau of Statistics (NBS).

This also represents a 47% decline compared to Q4 2024, when the country spent N3.3 trillion on petrol imports.

The steep fall marks a significant break from Nigeria’s multi-year pattern of rising dependence on foreign refined petrol and points to a growing shift driven by increased domestic supply from the Dangote Refinery, which has gained momentum this year.

Industry players say the downward trend is largely the result of the Dangote Refinery’s aggressive pricing strategy. Since beginning local distribution, the refinery has offered petrol at prices that are significantly cheaper than imported fuel—drawing strong interest from independent and major marketers nationwide. In early 2025, the pump price of petrol dropped to as low as N860 per liter in Lagos, down from over N1,000 previously, marking the first major retail relief in nearly a year.

Dangote’s competitive pricing has made his refinery a more attractive alternative to importation. Marketers are now sourcing directly from the local refinery in increasing numbers, encouraged by lower logistics costs and reduced foreign exchange exposure. The refinery, currently running at around 85% of its 650,000 barrels per day capacity, has become a central pillar in Nigeria’s fuel supply chain.

The NBS data confirms a structural shift. For the first time in years, Nigeria’s Q1 petrol import figures have reversed an upward trend. Between Q1 2020 and Q1 2024, the country’s fuel import bill more than quadrupled—from N732 billion to N3.81 trillion. The 2025 Q1 figure of N1.76 trillion brings Nigeria back to pre-2022 import levels, signaling that domestic refining is now beginning to meaningfully displace imported petrol.

However, there are growing concerns that the gains made could be short-lived. Oil prices have shown signs of a rebound in recent weeks, raising fears that a further surge could push up Dangote’s production costs. Since the refinery imports crude at international prices but sells fuel in the domestic market, any uptick in global oil prices could force it to raise pump prices—diminishing its competitive edge over imports.

A similar challenge had already emerged earlier this year when Dangote Industries briefly halted sales in naira due to the mismatch between the dollar-denominated cost of crude and the local currency revenue it received. Although the government later intervened to resolve the crude-for-naira impasse, the episode highlighted the refinery’s vulnerability to external price shocks.

Despite these concerns, the Dangote Refinery continues to shape Nigeria’s fuel supply landscape. In addition to its impact on retail pricing and import volumes, the NBS data also revealed that petrol still accounted for N89.18 billion—or 44.51%—of Nigeria’s imports from ECOWAS countries in Q1 2025. This indicates that while domestic production is on the rise, regional trade remains important in closing residual supply gaps.

Petrol also made up 41.86% of Nigeria’s trade inflows from the broader West African region and contributed 11.63% of total imports from the African continent. Other petroleum-based products such as gas oil (N23.15 billion) and petroleum bitumen (N20.58 billion) also ranked high among imports, reflecting continued reliance on foreign supply for a range of refined outputs.

The broader implication of the report is that Nigeria is entering a period of transition in its downstream sector. After decades of complete dependence on imported refined products, the country is beginning to reap the benefits of domestic refining. The challenge, however, lies in sustaining this progress amid the volatility of the global oil market and the currency pressures that continue to weigh on local refiners.

As the Dangote Refinery continues to scale up and other modular refineries come onstream, Nigeria could yet reduce its fuel import burden further. But for now, the outlook remains delicately balanced between emerging self-sufficiency and the persistent risks posed by external economic forces.

The Federal Ministry of Finance has refuted widespread media reports claiming that a proposed $5 billion oil-backed loan involving the Nigerian National Petroleum Company Limited (NNPC Ltd.) and Saudi oil giant Aramco has collapsed.

The ministry clarified that no final decision has been taken on the deal, and the reports suggesting its failure are “unfounded.”

In a statement issued on Wednesday by Mohammed Manga, Director of Information and Public Relations, the ministry described the claims as speculative and disconnected from the facts, stating that while the government is exploring various financing strategies, including forward sales of crude, it has yet to reach a conclusive agreement or make a public announcement regarding the proposed deal.

“The Federal Government of Nigeria is aware of recent media reports concerning a potential forward sale of crude oil involving NNPC Ltd. While market speculation is not uncommon in the context of ongoing economic reforms and transactions, no final decision has been announced by the Government, and commentary suggesting the collapse of any such initiative is unfounded,” the statement read.

The statement comes amid reports that negotiations between Nigeria and Aramco for the $5 billion loan had slowed due to a combination of falling global crude prices and concerns over Nigeria’s crude supply capacity. Sources close to the deal told Reuters that international lenders were growing increasingly cautious, fearing Nigeria may not be able to meet the long-term supply commitments required to back the loan.

If finalized, the transaction would mark the single largest crude-backed financing for Nigeria and Aramco’s first major oil-for-cash deal in the country. The facility was designed to help bolster Nigeria’s dollar liquidity at a time when foreign exchange reserves are under pressure and the local currency has faced repeated devaluations.

The federal government insists that it is still actively exploring the initiative as part of a broader strategy to shore up external reserves and support economic reforms introduced under the administration of President Bola Tinubu. Those reforms include the removal of fuel subsidies, the unification of exchange rates, and a renewed push for investment across critical sectors.

In recent years, Nigeria has turned to oil-backed loans to raise quick foreign exchange. One such arrangement was the $3.3 billion facility from Afreximbank, under which the country recently received a final tranche of $1.05 billion in April 2024. That facility is being repaid through crude oil priced at $65 per barrel, with Nigeria committing approximately 90,000 barrels per day for repayment.

However, the Aramco deal represents a far larger commitment and has drawn scrutiny over the sustainability of using future oil output as collateral, particularly amid declining production levels caused by sabotage, theft, and years of underinvestment in the upstream sector.

Responding to the controversy, the Ministry of Finance reiterated the government’s focus on “innovative, transparent, and fiscally responsible” financing mechanisms, stressing that Nigeria’s oil resources remain a critical lever for economic stability and liquidity enhancement.

“The Government remains focused on deploying a range of innovative, transparent, and fiscally responsible financing strategies to optimize Nigeria’s oil assets, improve external liquidity, and strengthen macroeconomic stability,” it said.

However, analysts note that while oil-backed deals offer short-term relief, they also present long-term fiscal risks if not carefully structured. These include potential future revenue shortfalls if oil prices decline further or if production remains below projection.

Stakeholders now await a clearer signal on whether the Aramco negotiations will be revived—or shelved indefinitely. Until then, the Ministry has urged the public and media to rely only on official communications regarding the status of the deal.

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