Nigeria’s petrol import costs surged to an unprecedented N15.42 trillion in 2024, more than doubling from N7.51 trillion in 2023, according to the National Bureau of Statistics (NBS). This 105.3% increase underscores the country’s enduring dependence on imported fuel, despite substantial investments in domestic refining capacity.
Analysts attribute the record import bill to a sharp 40.9% depreciation of the naira, which inflated import costs in local currency terms. In dollar terms, prices remained relatively stable. The situation is further compounded by supply chain inefficiencies, delays in refinery ramp-ups, and a persistent gap between domestic supply and national demand.
Over the past five years, Nigeria’s fuel import costs have soared. In 2020, the country spent N2.01 trillion, which more than doubled to N4.56 trillion in 2021. By 2022, the cost jumped to N7.71 trillion, reflecting rising crude prices and limited refining capabilities. The brief decline of 2.6% in 2023 to N7.51 trillion was quickly overturned in 2024, with expectations for a drop in imports unmet despite the commencement of operations at the 650,000 barrels-per-day Dangote Refinery and the partial resumption of the Port Harcourt Refinery.
Domestic Refining Capacity Falls Short
The Port Harcourt Refinery recently restarted its old plant, producing 60,000 barrels per day (bpd) out of a total installed capacity of 210,000 bpd. Additionally, the Warri Refinery’s 125,000 bpd facility resumed operations in December 2024 after a $897 million rehabilitation. However, these developments have proven insufficient to curb the rising import bill.
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Industry experts warn that Nigeria’s struggle to achieve energy self-sufficiency is also exacerbated by foreign exchange volatility and prolonged delays in refinery upgrades. The four state-owned refineries—located in Kaduna, Warri, and Port Harcourt—continue to operate below capacity, forcing the government to rely heavily on imports to bridge the supply gap.
Impact on Economy and Citizens
The soaring cost of fuel imports is straining government finances and eroding consumer purchasing power. The situation is particularly concerning given Nigeria’s ongoing battle with inflation, which hit 22.79% in December 2024, up from 21.34% a year earlier. The rising import bill also threatens to widen the budget deficit, potentially forcing the government to reconsider its subsidy strategy and seek alternative funding sources.
Analysts suggest that a sustainable path forward would involve accelerating refinery upgrades, enhancing supply chain efficiency, and stabilizing the naira. For now, however, Nigerians continue to bear the brunt of rising fuel costs, with transportation and living expenses climbing steadily.
