Nigeria’s oil export earnings reached a substantial N12.96 trillion in the first quarter of 2025, accounting for over 62% of the nation’s total export revenue during that period. This dominant performance in the export sector, driven primarily by crude oil sales, ironically coincided with persistent struggles within the domestic refining industry, which continued to grapple with inadequate crude oil supply. This stark contrast highlights the ongoing tension between maximizing export revenues and ensuring domestic petroleum needs are met through local refining. The significant export earnings contributed to a healthy trade surplus of N5.17 trillion, a considerable increase compared to the previous quarter, further underscoring the importance of oil exports to Nigeria’s overall economic balance sheet.
Despite its dominance, crude oil export revenue experienced a decline compared to the same period in 2024, indicating potential fluctuations in global oil markets or production challenges. However, crude oil maintained its position as Nigeria’s leading export commodity, dwarfing other exports like liquefied natural gas, petroleum gases, urea, and cocoa beans. This reliance on crude oil exports reinforces the urgency of diversifying Nigeria’s export portfolio to mitigate vulnerability to oil price volatility and ensure long-term economic stability. The country’s major crude oil buyers were primarily international, including India, the Netherlands, the United States, France, and Spain, emphasizing the continued dependence on external demand.
The irony of substantial crude oil exports alongside domestic refinery struggles is further complicated by the slow implementation of policies designed to address this very issue. The Domestic Crude Supply Obligation (DCSO) and the Domestic Crude Refining Requirement (DCRR), initiatives aimed at ensuring sufficient crude oil allocation to local refineries, have faced implementation challenges. This inaction has perpetuated the困境of domestic refiners, who often find themselves unable to access the crude oil they need, forcing continued reliance on imported refined products, which ultimately undermines efforts to achieve self-sufficiency in petroleum product supply.
Local refinery operators have voiced their concerns about the difficulties in accessing crude oil domestically, pointing out that producers often prioritize exporting crude for dollar earnings over supplying local refineries. This preference for exporting crude creates a frustrating paradox: Nigeria, a significant oil producer, struggles to meet its own domestic fuel needs because the raw material is readily sold abroad. This highlights the need for stricter enforcement of the DCSO and DCRR regulations to ensure that domestic refineries receive an adequate supply of crude oil, thereby reducing dependence on costly imports and stabilizing domestic fuel prices.
The situation is further exacerbated by the selective application of the naira-for-crude deal, which appears to favor only the Dangote refinery. While the Nigerian Upstream Petroleum Regulatory Commission has asserted its authority to enforce policy implementation, the NBS report reveals a significant proportion of crude oil exports are directed towards international buyers, indicating a potential gap between regulatory intent and actual practice. The report highlights India, the Netherlands, and France as the top three importers of Nigerian crude, with significant volumes also going to Spain, the United States, and several African countries.
Beyond crude oil, other petroleum products also contributed significantly to Nigeria’s export earnings in the first quarter of 2025, generating N4.48 trillion, a considerable increase compared to the previous year and quarter. This growth in non-crude oil petroleum product exports signifies a potential avenue for diversifying export revenue streams and reducing reliance on raw crude sales. Concurrently, the value of imported petroleum products decreased substantially, suggesting potential shifts in domestic consumption patterns or improved efficiency in the downstream sector. However, the fundamental issue of insufficient crude supply to local refineries remains a critical challenge that needs urgent attention to ensure long-term stability and self-sufficiency in the Nigerian petroleum sector.
