Nigeria’s Energy Sector Transformation: Local Refining Surge Slashes Import Bill by Over 95%, Bolstering Naira Stability
The Federal Government has announced a dramatic reduction in its petrol import bill, a testament to the significant strides made in local refining capacity. The nation’s petrol import expenditure has plummeted from approximately N2.3 trillion in the first quarter of 2025 to under N90 billion a year later, marking a reduction of over 95%. This fiscal achievement is directly linked to the surge in domestic petrol production, which has risen from a negligible level in 2023 to an impressive 48 million litres per day.
Mrs. Olu Verheijen, Special Adviser to the President on Oil and Gas, revealed these figures during the Nigerian-British Chamber of Commerce Energy Day 2026 in Lagos. In a presentation titled “Energy in Nigeria: From Potential to Reality,” Verheijen highlighted that, for the first time in a generation, the majority of petrol consumed in Nigeria is now refined domestically. This shift represents a critical pivot from a structural drain on scarce foreign exchange to a driver of economic resilience.
“For decades, every cargo of imported petrol was a standing demand for scarce dollars, a structural drain that weakened our currency,” Verheijen stated. “As local refining has risen, that drain has eased… Fewer dollars spent on fuel means less pressure on the Naira. Energy security and currency stability are not separate goals. They are the same goal.” This development is of paramount importance for legal and financial professionals, signalling a more stable macroeconomic environment and reduced currency risk for businesses operating within the energy value chain.
Beyond petrol refining, the administration has also succeeded in restoring investor confidence in crude oil and condensate production. Production averaged 1.64 million barrels per day in 2025, an increase of approximately 400,000 barrels per day since 2023, representing the highest onshore level in two decades. Furthermore, over four billion dollars in international oil company divestments have been concluded, facilitating deeper indigenous participation in onshore operations while majors refocus on deep-water and integrated gas projects. This strategic realignment offers new opportunities for local partnerships and investment, requiring careful legal and commercial due diligence.
Verheijen also noted a consistent high pipeline uptime and a sharp reduction in illegal refining activities, underscoring improved operational efficiency and security within the sector. “Every additional barrel matters — for revenue, for jobs, and for the strength of the federation,” she emphasised.
Reflecting on the state of the sector in 2023, Verheijen described a landscape under severe strain, characterised by fiscally unsustainable subsidies and foreign-exchange distortions that deterred investment. Production was below potential, and power sector debt crippled the gas-to-power value chain. The administration’s initial mandate was to halt these detrimental trends and rebuild the sector’s foundations.
The Tinubu administration’s decisive actions, including the removal of the fuel subsidy and the reform of the exchange rate regime, have been credited with restoring fiscal credibility. These difficult but necessary measures have yielded tangible results, with total federation revenue nearly doubling from approximately N12 trillion in 2023 to about N21 trillion in 2024. Crucially, despite deregulation, the government has successfully averted the chronic nationwide petrol queues that were once a hallmark of scarcity, ensuring a more stable supply for consumers and businesses alike. This regulatory overhaul and its positive economic outcomes are critical considerations for corporate strategists, investors, and legal counsel navigating Nigeria’s evolving business landscape.
