Nigeria, Africa’s largest crude oil producer, imported crude oil worth a staggering N5.734 trillion in 2025, even as domestic refineries continued to face persistent feedstock shortages. This surge in imports underscores a growing paradox in the country’s oil sector, coming despite the Federal Government’s naira-for-crude policy, which aimed to channel more domestic crude to local refineries. Analysts say the gap between robust crude production and insufficient local refining supply reveals deep structural challenges that have yet to be addressed.
Data from the National Bureau of Statistics show that crude imports rose steadily through the year, peaking at N1.28 trillion in July before sharply declining to zero in December. The fluctuations reflect volatile supply conditions, with refineries adjusting monthly to shortages. Key operators, from modular refineries to the Dangote Refinery, cited limited allocations under domestic supply frameworks and the “willing buyer, willing seller” policy as major constraints. Many refineries, including OPAC, operated at just a fraction of their capacity due to a lack of crude.
The Dangote Refinery, the country’s largest, reportedly receives only five out of the thirteen monthly cargoes needed from the Nigerian National Petroleum Company (NNPC) under the naira-for-crude policy. The remaining eight cargoes are sourced internationally at prevailing market rates, forcing the refinery to spend foreign exchange despite the local-currency arrangement. International Oil Companies also prioritize exports under dollar-denominated contracts, further limiting crude availability for domestic processing.
Experts say the naira-for-crude policy has failed to fully stabilize domestic supply or lower fuel prices. Jeremiah Olatide, CEO of Petroleumprice.ng, explained that reliance on international pricing benchmarks and insufficient crude allocation continue to push refineries toward imports. Professor Dayo Ayoade added that structural issues—such as underinvestment in the upstream sector, export obligations, and logistics bottlenecks—make domestic crude supply unreliable, ensuring that imported crude remains integral to refinery operations.
Looking ahead, analysts warn that crude importation is likely to continue in 2026. Despite recent investments in local refineries and the Petroleum Industry Act’s supply obligations, persistent gaps between upstream production and downstream demand limit energy independence. As Nigeria seeks to maximize value from its hydrocarbon resources, aligning crude production with domestic refining needs will remain critical to reducing reliance on imported crude.
source: punch