Nigeria’s oil sector witnessed a significant structural shift in 2025, as the rise of large-scale domestic refining—anchored by the Dangote Petroleum Refinery—reshaped long-standing trade patterns, even pushing the country into the unusual position of importing crude oil despite being a major global producer.
According to the Balance of Payments report released by the Central Bank of Nigeria, crude oil imports totalled $3.74 billion during the year. These imports were directly linked to feedstock requirements for the Dangote refinery and contributed to movements in Nigeria’s current account position.
Overall, Nigeria recorded a current account surplus of $14.04 billion in 2025. While this marked a decline from $19.03 billion in 2024, it remained significantly higher than the $6.42 billion posted in 2023, reflecting a still-positive—though evolving—external balance.
The drop from 2024 levels was partly driven by structural adjustments in oil trade flows. Notably, crude oil exports declined by 14.41 percent, falling from $36.85 billion in 2024 to $31.54 billion in 2025. This reduction reflects a shift in crude allocation, as more volumes were diverted toward domestic refining rather than exports.
Despite this decline, Nigeria’s goods account strengthened, recording a surplus of $14.51 billion in 2025, up from $13.17 billion the previous year. This improvement was supported largely by the Dangote refinery’s activities and stronger performance in other export segments.
A major boost came from refined petroleum exports, which reached $5.85 billion, driven by Dangote refinery output. Increased gas exports to international markets also contributed to the stronger goods balance.
At the same time, the availability of locally refined petroleum products significantly reduced Nigeria’s dependence on imported fuel. Imports of refined petroleum products fell sharply by 28.88 percent—from $14.06 billion in 2024 to $10.00 billion in 2025—while total oil-related imports also declined.
However, these gains were offset by rising demand for foreign goods. Non-oil imports increased by 13.60 percent, climbing from $25.74 billion to $29.24 billion, underscoring persistent pressure on foreign exchange from the broader economy.
External payments also weighed on the current account. Net outflows in the services account rose from $13.36 billion in 2024 to $14.58 billion in 2025, driven by higher spending on transport, travel, insurance, and related services.
Similarly, net outflows in the primary income account surged by 60.88 percent to $9.09 billion, largely due to increased dividend repatriation and interest payments to foreign investors.
In contrast, secondary income inflows declined slightly, falling from $24.88 billion in 2024 to $23.20 billion in 2025. This drop was attributed to weaker official development assistance and reduced personal transfers, although remittances remained a vital source of foreign exchange.
On the financial account side, Nigeria experienced a reversal in position. The country recorded net borrowing of $1.69 billion in 2025, compared to a net lending position of $9.65 billion in 2024.
Portfolio investment inflows dropped sharply by 48.3 percent to $8.04 billion, indicating reduced appetite for short-term financial assets. In contrast, foreign direct investment increased to $4.01 billion from $1.61 billion in the previous year, pointing to a gradual shift toward longer-term capital inflows.
The report also highlighted increased offshore investment activity by Nigerians, with both direct and portfolio investment assets rising significantly during the year.
Despite pressures across several components, Nigeria maintained an overall Balance of Payments surplus of $4.23 billion in 2025, though lower than the $6.83 billion recorded in 2024. External reserves improved, rising by 13.83 percent to $45.75 billion at the end of December 2025, supported by inflows and stronger external buffers.
Earlier reports had already pointed to the deepening contradiction in Nigeria’s oil sector. Despite its status as Africa’s largest crude oil producer, the country imported crude oil worth approximately N5.734 trillion between January and December 2025. This trend has been linked to persistent feedstock shortages faced by domestic refineries, exposing structural inefficiencies in supply.
This situation persists despite the Federal Government’s widely publicised naira-for-crude policy, which was designed to prioritise local crude supply to domestic refiners and reduce reliance on foreign exchange.
Energy analysts have, however, criticised the policy’s implementation and effectiveness. Jeremiah Olatide, Chief Executive Officer of Petroleumprice.ng, argued that the initiative has delivered limited results since its introduction in 2024.
He noted that the Dangote refinery still sources between 65 and 70 percent of its crude feedstock from international markets, while approximately 95 percent of modular refineries also rely on crude obtained outside the framework of the naira-for-crude policy.
According to him, this continued dependence on imported crude explains the sustained high levels of crude inflows into Nigeria in 2025 and the limited impact of the policy on fuel pricing.
Olatide further observed that although the expansion of refining capacity has improved the availability of petroleum products—effectively eliminating supply shortages—it has not translated into lower depot or pump prices.
He attributed this to the continued reliance on international pricing benchmarks, even for crude supplied locally, which keeps domestic fuel prices aligned with global market dynamics.
In essence, Nigeria’s oil sector is undergoing a complex transition. While increased refining capacity is gradually reducing reliance on imported fuel and boosting export of refined products, the country remains constrained by supply chain inefficiencies, pricing structures, and policy limitations that continue to shape its trade balance and energy economics.