Nigeria’s Petrol Puzzle: Why Rising Imports Are Returning Despite Expanding Refining Capacity

As Nigeria’s domestic refining capacity expands, reliance on imported petrol is rising again. According to fresh data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), average daily domestic petrol supply fell sharply to 25.8 million litres in July 2026, down from 32.5 million litres in June,  a decline of about 21 percent.

At the same time, petrol imports increased by nine percent, from 18.1 million litres per day in June to 19.7 million litres per day in July. The figures raise important questions about the sustainability of Nigeria’s transition from an import-dependent fuel market to one anchored on domestic refining.

Nigeria’s total daily petrol supply fell from 50.6 million litres in June to 45.5 million litres in July, representing a 10 percent decline.

But the more significant development is the changing composition of that supply.

Domestic refineries accounted for approximately 56.7 percent of July’s petrol supply, while imports made up about 43.3 percent. In January, domestic supply stood at 40.1 million litres per day, compared with 24.8 million litres of imports.

This means that within seven months, domestic petrol supply has fallen by more than a third from its January level, while imports, after falling dramatically earlier in the year, have recovered to almost 20 million litres per day.

Significant direction

Nigeria has spent years pursuing a structural shift away from importing refined petroleum products, particularly petrol. The commissioning and ramp-up of the Dangote Petroleum Refinery was expected to accelerate that transition.

Yet the latest NMDPRA figures suggest that increased refining capacity does not automatically translate into stable domestic fuel supply. The July data are particularly interesting because the decline in domestic petrol supply occurred alongside substantial production by the Dangote refinery.

The refinery produced an average of 25.9 million litres of petrol per day during the month, according to the NMDPRA data. Domestic receipts stood at 25.8 million litres per day, while exports were also recorded.

A refinery can produce substantial volumes while the broader market still experiences supply constraints or relies on imports. Issues around crude availability, refinery operations, distribution, commercial decisions, product specifications, logistics and market demand can all influence how much refined product ultimately reaches the domestic market.

The NMDPRA data show that crude receipts by domestic refineries fell from about 632,000 barrels per day in June to 585,000 barrels per day in July, an eight percent decline. Domestic refineries processed 17.88 million barrels of crude in July, compared with 19.12 million barrels in June.

For an industry trying to maximise domestic refining, the availability of reliable crude feedstock remains critical. The rise in petrol imports should not necessarily be interpreted as evidence that domestic refining has failed. Rather, it demonstrates that Nigeria’s downstream market is still in a transitional phase.

The country is simultaneously experiencing growing domestic refining capacity, changing consumption patterns and a more commercially driven fuel market following the removal of petrol subsidies. The NMDPRA data show that daily petrol consumption actually fell by 25 percent, from 47.4 million litres in June to 35.7 million litres in July.

Despite the fall in domestic supply, petrol stocks were sufficient for 22.4 days in July, up from 19.7 days in June. In other words, Nigeria had a larger stock buffer even as both supply and consumption declined. This suggests that the July increase in imports may partly reflect inventory management and market balancing rather than an immediate return to the extreme import dependence of the past.

July figures warning

If domestic crude supply to refineries continues to fluctuate or decline, refiners may have to rely increasingly on imported crude or, in some circumstances, imported refined products. That would weaken one of the central economic arguments for domestic refining.

Interestingly, NMDPRA data indicate that of the crude processed by domestic refineries in July, 12.75 million barrels came from domestic sources while 5.13 million barrels were imported. This means Nigeria’s refining transition is already partly dependent on imported feedstock.

A refinery is an industrial asset and can source crude wherever it is commercially optimal. But for a crude-producing country like Nigeria, persistent dependence on imported feedstock would expose deeper weaknesses in the country’s upstream-to-downstream value chain.

The market is also changing

Another important signal from the NMDPRA data is the decline in petroleum consumption. Petrol consumption fell to 35.7 million litres per day in July, while diesel consumption declined by eight percent to 14.7 million litres per day. Aviation fuel consumption fell even more sharply, by 41 percent. LPG was the exception, with consumption rising by seven percent.

The reduction in petrol consumption could reflect the continuing effects of higher fuel prices on household and business behaviour, improved efficiency, reduced discretionary movement and a broader adjustment in the economy.

The July numbers should prompt closer monitoring of at least four issues.

First, crude availability. Domestic refineries need predictable access to crude if Nigeria wants to reduce its dependence on imported petroleum products.

Second, refinery utilisation. Installed capacity has little value if operational constraints prevent refineries from consistently producing at commercially meaningful volumes.

Third, the structure of petrol imports. Imports may remain necessary as a buffer while domestic refining capacity stabilises. The policy objective should therefore be to reduce unnecessary import dependence without creating artificial shortages.

Fourth, transparency in the downstream market. Regular publication of detailed supply, production, import, stock and consumption data is essential for investors, policymakers and consumers to understand what is actually happening in the market.