The Nigerian National Petroleum Corporation (NNPC) Limited and several oil marketers spent over N5.5 trillion importing Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO or diesel) between October 1, 2024, and January 31, 2025, despite increased local refining capacity, port documents have revealed.
This comes amid the Dangote Refinery’s legal action against the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the NNPC, and other oil marketers to compel the industry regulator to stop issuing fuel import licenses in a bid to protect locally refined products.
Chairman of the Dangote Group, Aliko Dangote, had earlier alleged that imported petroleum products are bad.
Documents analyzed by THISDAY show that in just four months, over 3.2 million metric tons of petrol and 980,485 metric tons of diesel were imported into the country. Converting these figures using standard industry factors suggests approximately 4.29 billion liters of petrol and 1.153 billion liters of diesel were brought into Nigeria at a cost exceeding N5.5 trillion, based on the average landing cost.
NNPC Defends Its Importation, Citing Economic Realities
Despite the heavy financial burden associated with importing refined petroleum products, the NNPC has defended its actions, stating that its purchasing decisions are dictated by economic forces and pricing considerations.
The state-owned oil company recently stated that while it prioritizes sourcing products from domestic refineries, this is contingent upon economic viability. If local supply is cost-effective, it will be preferred. However, the same principle applies to other marketers, who will also evaluate total costs when deciding whether to buy locally or import.
Industry insiders note that although Nigeria has seen an increase in local refining capacity—particularly with the restart of the Warri and Port Harcourt refineries and the commencement of operations at the $20 billion Dangote Refinery—the country remains heavily reliant on imports.
Local Refining Capacity Underutilized, Dangote Refinery Struggles for Crude Supply
The Dangote Refinery has turned to the U.S. for adequate crude oil supply after struggling to secure supply from the NNPC. Sources within the company revealed that the refinery has ramped up production from an initial 385,000 barrels per day (bpd) to 550,000 bpd, a level that should be sufficient to meet domestic demand and even allow for exports.
In what appears to be a deliberate supply squeeze, the NNPC has failed to meet its crude supply obligations under the naira-for-crude deal, which was designed to ensure that local refiners pay for crude in naira and sell refined products to Nigerian marketers in naira—a strategy aimed at reducing forex dependency and stabilizing fuel prices.
Industry sources revealed that instead of increasing supply, the NNPC’s crude allocation to Dangote Refinery has actually declined. In February 2025, only four cargoes were allocated to the Dangote Refinery. In March 2025, the allocation further dropped to two cargoes, each containing 950,000 barrels, totaling 1.9 million barrels for the month. This translates to just 61,290 bpd, far below the 385,000 bpd target.
Meanwhile, the NNPC has continued supplying crude to its own refineries, albeit in limited volumes, while also fulfilling its loan repayment obligations to financiers through crude exports. Of the 1.4 million barrels allocated for March, the NNPC received 17 cargoes, representing 35% of total production. Five cargoes were allocated to Dangote Refinery, two to Warri Refinery, and three to Port Harcourt Refinery. The remaining seven cargoes were allocated to various financiers as part of loan repayment, with no other local refineries receiving crude allocations.
Despite supply constraints, the Dangote Refinery has continued selling products to marketers in naira, even absorbing logistics costs to ensure uniform pricing across the country. A source close to the refinery stated that the refinery has generously assumed an equalization status, a responsibility typically undertaken by the government. This has been met with enthusiasm by partners such as MRS, Heyden, and Ardova.
Recently, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) signed an agreement with Dangote Refinery to distribute its Premium Motor Spirit (PMS) at a uniform price across all its filling stations nationwide.
However, despite the presidential directive for local crude sales to be conducted in naira, reports suggest that transactions are still partially settled in dollars. Of the five cargoes allocated to Dangote Refinery for March, two cargoes will be paid for in naira, as per government policy. The remaining three cargoes must be paid for in dollars from export proceeds, contradicting the intended goal of the naira-for-crude deal.
Who Benefits from Continuous Importation?
The continued issuance of fuel import licenses despite sufficient local refining capacity has raised serious concerns among industry analysts and economic experts. Many believe that certain powerful interests within the oil sector stand to benefit financially from continued dependence on fuel imports—even at the expense of the Nigerian economy and the survival of local refineries.
Economic analysts have argued that Nigeria cannot continue spending trillions on fuel imports while local refineries remain underutilized. This, they said, is a self-inflicted crisis that benefits a few at the expense of the nation.
It has been noted that if the government is serious about energy security, it must prioritize local refining and stop granting import licenses.
Although the NNPC claims that imports are based on pricing and economic realities, stakeholders believe that the continued importation of petroleum products undermines local production efforts and maintains Nigeria’s reliance on costly foreign fuel supplies.
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