July 06, (THEWILL) — Nigeria’s external sector posted one of its strongest starts to a year in recent history as a sharp decline in refined petroleum imports helped reduce the country’s import bill, widen its trade surplus and ease pressure on foreign exchange demand, pointing to what analysts describe as an emerging structural shift in the economy.
Official data from the National Bureau of Statistics (NBS), the Central Bank of Nigeria (CBN) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) show that local refining, led by the ramp-up of the Dangote Refinery, significantly altered Nigeria’s import profile in the first quarter of 2026. While stronger crude oil exports and a surge in foreign portfolio inflows also supported the external sector, the steep contraction in petrol imports marked one of the most significant changes in the country’s trade dynamics.
The NBS Foreign Trade Statistics showed that Nigeria’s total merchandise trade stood at N34.79 trillion in the first quarter of 2026. Exports accounted for N21.17 trillion, representing 60.85 percent of total trade, while imports declined to N13.62 trillion from N16.64 trillion recorded in the corresponding period of 2025, translating to an 18.17 percent year-on-year decline.
The lower import bill contributed to a trade surplus of N7.54 trillion during the quarter, representing an increase of 340.88 percent from the N1.71 trillion surplus recorded in the preceding quarter. The improvement reflected a combination of resilient crude oil export earnings and a significant reduction in refined petroleum imports, which have historically ranked among Nigeria’s largest sources of foreign exchange demand.
The most striking evidence of the shift was the collapse in the country’s petrol import bill.
According to official trade data, Nigeria spent only N87.4 billion on Premium Motor Spirit (PMS) imports during the first quarter of 2026, representing a ninety-six percent decline compared with the corresponding period of the previous year. The figure underscores the growing impact of domestic refining on a segment that had, for decades, accounted for a substantial portion of Nigeria’s import expenditure.
Imports of other mineral and petroleum products were valued at N748.1 billion during the quarter, but the steep reduction in PMS imports substantially altered the composition of the country’s import basket.
The decline coincided with a rapid increase in local refining capacity.
NMDPRA data showed that Dangote Refinery produced an average of 48.2 million litres of Premium Motor Spirit daily during the review period. Of this volume, about 34.2 million litres per day were supplied to domestic marketers, accounting for roughly 72.3 percent of Nigeria’s estimated daily PMS consumption benchmark of 47.3 million litres.
The refinery also maintained a domestic supply arrangement capable of delivering up to 65 million litres of PMS daily to the Nigerian market, with excess production earmarked for export markets.
The increased availability of locally refined fuel significantly reduced dependence on imported petrol and eased demand for foreign exchange required to finance those imports.
Although Nigeria continued to import some petroleum products and crude grades required for refining operations, the structure of those imports changed. Trade statistics showed that crude oil imports rose by 309 percent to 1.39 billion dollars during the quarter as refiners sourced alternative crude blends to optimise production. Unlike refined fuel imports, however, these purchases supported domestic value addition before products were supplied to local consumers or exported.
The reconfiguration of Nigeria’s petroleum trade occurred alongside a broader improvement in external sector indicators.
Data from the Central Bank of Nigeria showed that the country’s gross external reserves climbed to 51.04 billion dollars on June 18, 2026, representing the highest reserve level in about 17 years. On a rolling twelve-month basis, reserves increased by 13.40 billion dollars, equivalent to a 35.5 percent expansion.
The reserve build-up coincided with lower fuel import demand, stronger crude oil receipts, and substantial foreign capital inflows into the domestic financial market.
Capital importation figures published by the NBS showed that Nigeria attracted 10.37 billion dollars during the first quarter of 2026, an increase of 83.83 percent from the 5.64 billion dollars recorded in the corresponding period of 2025.
However, the composition of those inflows highlighted an important distinction.
Foreign Portfolio Investment accounted for 9.86 billion dollars, representing 95.09 percent of total capital imported into the country during the quarter. Foreign Direct Investment amounted to just 135.08 million dollars, indicating that most of the inflows were directed toward financial assets rather than long-term productive investments.
The data suggests that while portfolio inflows strengthened foreign exchange liquidity and supported reserve accumulation, the reduction in refined petroleum imports addressed one of the country’s largest structural sources of dollar demand.
The combined effect was reflected in the foreign exchange market.
Compared with the sharp volatility experienced in previous years, the official Nigerian Foreign Exchange Market traded within a relatively narrower range during much of the first half of 2026, while the premium between the official and parallel markets also moderated considerably.
For businesses dependent on imported raw materials and machinery, the more stable foreign exchange environment reduced uncertainty surrounding pricing, procurement, and production planning.
The trade data also indicated that Nigeria’s export base remained heavily dependent on hydrocarbons despite improvements in the external balance.
Crude oil exports generated N11.20 trillion during the first quarter, accounting for 52.92 percent of total exports. Non-crude exports contributed N9.97 trillion, representing 47.08 percent of export earnings.
The figures suggest that although the country has made measurable progress in reducing refined fuel imports, diversification of export earnings remains a critical challenge for sustaining long-term external sector resilience.
Energy market data further illustrated the changing structure of domestic fuel supply.
National PMS consumption averaged 47.3 million litres per day in March, while national stock sufficiency averaged 21 days. Diesel consumption stood at 14.5 million litres daily. Domestic diesel production reached 3.9 million litres per day, complemented by imports of about 6.4 million litres daily, leaving average diesel stock sufficiency at 55 days.
The statistics indicate that while Nigeria has made substantial progress in domestic petrol supply, opportunities remain to deepen local production across other refined petroleum products.
Taken together, the data points to a significant change in Nigeria’s external accounts during the opening months of 2026.
An 18.17 percent decline in total imports, a ninety-six percent collapse in the petrol import bill, a N7.54 trillion trade surplus, gross external reserves exceeding 51 billion dollars, and improved foreign exchange market stability all emerged within the same period that domestic refining capacity expanded sharply.
The evidence does not suggest that local refining alone transformed Nigeria’s external position. Strong crude oil exports, tighter monetary conditions, and substantial foreign portfolio inflows also played important roles in strengthening reserves and improving liquidity.
Nevertheless, the figures indicate that Nigeria’s dependence on imported petrol, a longstanding source of pressure on the country’s foreign exchange earnings, has reduced materially.
For decades, refined petroleum products represented one of the largest claims on Nigeria’s scarce foreign exchange resources despite the country’s status as a major crude oil producer. The first quarter of 2026 suggests that this pattern is beginning to change.
Whether the gains recorded in the opening months of the year are sustained will depend on continued refinery operations, adequate crude supply, stable energy policies, and stronger growth in non-oil exports. For now, however, the official data shows that local refining has begun to reshape Nigeria’s import profile, easing pressure on the external sector and marking one of the most significant structural shifts in the country’s trade dynamics in recent years.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
