In a transformative shift for Nigeria’s energy landscape, the nation’s petrol import bill plummeted by 54% in the first quarter of 2025, dropping from N3.81 trillion in Q1 2024 to N1.76 trillion, according to the National Bureau of Statistics (NBS). This dramatic decline, also reflecting a 47% reduction from N3.3 trillion in Q4 2024, is largely credited to the ramped-up operations of the Dangote Petroleum Refinery, which has significantly boosted local supply. As Africa’s largest oil producer moves toward energy self-sufficiency, this milestone underscores the pivotal role of domestic refining in reshaping Nigeria’s economic and energy dynamics.
The Dangote Effect: Rewriting Nigeria’s Energy Story
For decades, Nigeria’s paradoxical reliance on imported petrol—despite producing over 1.3 million barrels of crude oil daily—has strained its economy, draining foreign exchange reserves and fueling inflation. The $20 billion Dangote Refinery, with its 650,000 barrels-per-day capacity, has begun to reverse this trend. Operating at about 85% capacity, the refinery is supplying a substantial portion of Nigeria’s daily petrol demand of approximately 32 million liters, reducing the need for costly imports.
The NBS data highlights a sharp reversal from a five-year trend of rising import costs, which peaked at N3.81 trillion in Q1 2024. The Q1 2025 figure of N1.76 trillion marks a return to pre-2022 import levels, signaling a structural shift in Nigeria’s petroleum trade. Posts on X echo this sentiment, with users celebrating the refinery’s role in making Nigeria a net exporter of petroleum products, achieving a trade surplus with N4.5 trillion in exports against N3.8 trillion in imports.
Competition and Price Dynamics
The rise of local refining, led by Dangote, has not only cut import costs but also spurred competition, driving down petrol prices. In early 2025, competition between Dangote and the Nigerian National Petroleum Company Limited (NNPC) pushed pump prices to as low as N860 per liter in Lagos and N880 in Abuja, a significant relief from highs of N1,200 per liter in some areas. However, price fluctuations persist, with some stations reporting increases to N930–N970 per liter by March 2025 due to a temporary halt in Dangote’s naira-based sales amid crude supply disputes.
Despite these challenges, the refinery’s price reductions—such as slashing ex-depot prices from N950 to N825 per liter by February 2025—have pressured importers, who face losses as imported petrol’s landing cost (N868.33 per liter) exceeds Dangote’s rates. This has forced marketers to pivot toward local sourcing, further reducing import volumes from 44.6 million liters per day in August 2024 to 14.7 million liters by April 2025.
Challenges and Controversies
While Dangote’s impact is undeniable, challenges remain. The refinery has faced hurdles in securing consistent crude supplies, with allegations of deliberate shortages to maintain import dependency. A naira-for-crude deal with NNPC, intended to stabilize prices and reduce forex pressure, stalled in March 2025, prompting Dangote to temporarily shift to dollar-based crude purchases and suspend naira-based fuel sales. This led to price hikes and concerns over market stability.
Moreover, some oil marketers continue importing to bridge supply gaps, with N6 trillion spent on fuel imports in the first five months of 2025, highlighting that local refineries, including Dangote, met only 50% of petrol demand in February 2025. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has faced criticism for approving import licenses, which some argue undermines local refining efforts.
Broader Implications
The decline in petrol imports has far-reaching implications. Economically, it eases pressure on Nigeria’s foreign exchange reserves, potentially strengthening the naira. Regionally, Nigeria’s reduced import demand is disrupting the $17 billion gasoline trade from Europe to West Africa, with South Africa overtaking Nigeria as Africa’s largest fuel importer in Q1 2025.
Socially, cheaper and more stable fuel prices could alleviate consumer burdens, though erratic pricing and supply chain issues remain concerns. Industry stakeholders, including the Crude Oil Refinery Owners Association of Nigeria (CORAN), urge marketers to adapt to local refining to avoid obsolescence, while NNPC emphasizes its shift to local sourcing, claiming no fuel imports in 2025.
Looking Ahead
The Dangote Refinery’s success in slashing Nigeria’s petrol import bill by 54% in Q1 2025 marks a turning point, but full energy independence hinges on resolving crude supply bottlenecks and regulatory inconsistencies. With plans to export surplus petrol, diesel, and aviation fuel to West Africa and beyond, Dangote is positioning Nigeria as a potential refining hub. If sustained, this shift could redefine Nigeria’s energy market, reduce economic vulnerabilities, and set a precedent for other African nations.
As one X user noted, “Dangote Refinery saved Nigeria from importation of refined oil,” reflecting growing public optimism. Yet, the path to self-sufficiency requires collaboration between government, regulators, and industry players to ensure local refineries like Dangote, Port Harcourt, and modular facilities can meet demand without external reliance.
