CBN Releases $1.26bn Forex for Fuel Importation Despite Dangote Refinery Output

Fuel Imports Still Dominate Despite Local Refining

NMDPRA data show that 69 per cent of the 21 billion litres of petrol consumed in Nigeria between August 2024 and early October 2025 were imported, underscoring marketers’ preference for foreign-sourced products even as local output from the Dangote Refinery improves.

Between January and March 2025, importers brought in a total of 2.28 billion litres of petrol, one of the lowest quarterly volumes in recent years — a development analysts attribute to the gradual transition toward local refining and blending.

The CBN’s breakdown revealed that $457.83 million was released in January (36.2 per cent), dropping to $283.54 million in February (22.5 per cent), before rising again to $517.55 million in March (41.3 per cent).

Similarly, NMDPRA figures show that imports stood at 724.5 million litres in January, 760 million litres in February, and 803.7 million litres in March.

CBN and Market Realities

Fuel importation continues to be one of the major consumers of Nigeria’s foreign exchange, putting additional pressure on external reserves and influencing the naira-dollar exchange rate.

Energy economists note that the forex allocation pattern suggests that Nigeria’s downstream operators still rely heavily on imported refined products for stability and pricing competitiveness.

“The gradual shift to local refining is happening, but price dynamics and foreign exchange availability remain key determinants for market behaviour,” an energy analyst Emmynet24 news media.

Competition Between Dangote and Importers

The competition between Dangote Petroleum Refinery and fuel importers has intensified in recent months as both sides battle for market share.

While the 650,000 barrels-per-day refinery has consistently maintained that it can meet domestic demand and export to foreign markets — including the United States — many marketers have continued to import, citing pricing as their main motivation.

The National Publicity Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, told Emmynet24 news media that marketers would always buy from the most cost-effective source.

“In this business, pricing is everything. Marketers will always go for the most affordable option because our margins are very thin,” Ukadike explained.
“If imported products are cheaper, we have no choice but to buy from importers. But if Dangote’s refinery offers a better price, of course, we will buy locally.”

He added that the price difference between imported and locally refined fuel fluctuates due to global oil prices, exchange rate movements, and government policy adjustments.

“No marketer can afford sentiment when it comes to survival,” Ukadike said. “Our decisions are purely economic, not emotional.”

Import Parity Prices and Exchange Rate Pressure

Meanwhile, the Major Energies Marketers Association of Nigeria (MEMAN), in its latest Energy Bulletin, reported a sustained decline in the import parity price (IPP) of Premium Motor Spirit (PMS), driven by falling international oil prices and continued volatility in Nigeria’s exchange market.

According to MEMAN, the current estimated IPP of petrol stands at ₦805.46 per litre at the spot rate — a figure that highlights the persistent challenge of aligning local pump prices with global market realities.

Outlook

Industry experts believe that while the Dangote Refinery’s full integration into the domestic supply chain will eventually reduce Nigeria’s fuel import bill, the foreign exchange dependency of the downstream sector remains a structural challenge that requires coordinated fiscal and monetary policy action.