CBN Releases $1.26 Billion to Oil Marketers as Battle for Nigeria’s Fuel Market Intensifies Between Dangote Refinery and Importers

The Central Bank of Nigeria (CBN) has disbursed a total of $1.259 billion to players in the oil sector for the importation of petroleum products and related items during the first quarter of 2025. This development comes amid persistent importation of fuel by marketers despite the operational readiness and growing output of the Dangote Petroleum Refinery.

Fresh data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) revealed that petroleum marketers accounted for 69 per cent of the 21 billion litres of petrol consumed nationwide between August 2024 and early October 2025.

Between January and March 2025, Nigeria imported about 2.28 billion litres of petrol, one of the lowest quarterly import figures in recent years, signalling a gradual shift towards local refining and blending. Nonetheless, the importation trend continues to exert pressure on the nation’s foreign reserves and the naira-dollar exchange rate.

A breakdown from the CBN’s quarterly statistical bulletin indicates a fluctuating pattern in forex allocation to oil importers.

January 2025: $457.83 million (36.2%)

February 2025: $283.54 million (22.5%)

March 2025: $517.55 million (41.3%)

Correspondingly, NMDPRA data showed monthly fuel import volumes of 724.5 million litres in January, 760 million litres in February, and 803.7 million litres in March.

The competition between Dangote Refinery and traditional importers has intensified, with both sides battling for dominance in the downstream sector. Despite the refinery’s capacity to meet local demand, some marketers have chosen to continue importing due to price differences and market flexibility.

Interestingly, while some Nigerian marketers import fuel, Dangote Refinery has exported its products to countries such as the United States and other international markets, underscoring its production strength and global competitiveness.

Industry experts note that pricing remains the ultimate factor driving purchasing decisions in the downstream sector. The National Publicity Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, explained that marketers always opt for the most affordable product source to survive in a price-sensitive market.

He emphasized that the price gap between imported and locally refined fuel often fluctuates due to variations in global crude prices, exchange rate movements, and government fiscal policies forcing marketers to constantly adjust sourcing strategies.

The Major Energies Marketers Association of Nigeria (MEMAN), in its latest Energy Bulletin, reported a sustained drop in the import parity price of Premium Motor Spirit (PMS) now estimated at ₦805.46 per litre at spot rates. This reflects the combined impact of global oil price moderation and the ongoing volatility of Nigeria’s foreign exchange market.

The unfolding dynamics between Dangote Refinery and fuel importers are redefining Nigeria’s downstream petroleum landscape. As local refining capacity strengthens and forex allocation tightens, the coming quarters may witness a deeper shift toward domestic supply dominance, potentially easing Nigeria’s foreign exchange burden and enhancing energy security.