Nigeria’s spending on the importation of petroleum products has fallen sharply by 54 per cent over the past two years, dropping 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 (CBN).
A review of the CBN’s Balance of Payments reports for 2023, 2024 and the third quarter of 2025 shows a steady year-on-year decline in fuel import bills, reflecting reduced foreign exchange outflows linked to petroleum product imports.
The figures indicate that fuel import costs declined from $14.58bn between January and September 2023 to $11.38bn in the same period of 2024, representing a reduction of $3.20bn or 21.9 per cent. The downward trend intensified in 2025, with imports falling further by $4.67bn, or 41 per cent, to $6.71bn within the first nine months of the year.
Overall, Nigeria spent $7.87bn less on refined petroleum product imports in the first nine months of 2025 compared with the corresponding period of 2023, highlighting a significant easing of pressure on foreign exchange outflows.
CBN data also showed a 41 per cent year-on-year decline in refined fuel imports by the third quarter of 2025, signaling early signs of import substitution as new and rehabilitated refineries begin to scale up operations.
The reduction in foreign exchange spending comes amid broader structural reforms and market adjustments aimed at strengthening Nigeria’s external reserves and stabilizing the naira.
For decades, Nigeria depended heavily on imports, particularly refined petroleum products due to limited domestic refining capacity, weak industrial output and underinvestment in critical infrastructure. This reliance made fuel imports one of the largest drains on the country’s foreign exchange earnings.
The removal of petrol subsidies in 2023 marked a major turning point, as higher pump prices reduced consumption and curtailed arbitrage-driven demand. Combined with tighter foreign exchange management by the CBN, the policy shift helped moderate import volumes and speculative FX demand linked to fuel imports.
Analysts also attribute the decline to the gradual expansion of domestic refining capacity in the downstream oil sector. Industry experts note that increased competition, particularly from the $20bn Dangote Petroleum Refinery in Lekki, has intensified pressure on fuel importers and reduced Nigeria’s dependence on imported refined products.
