FG: How Nigeria Reduced Fuel Import Losses by over N6 Trillion in 9 months

• Targets 1 million bpd local refining in medium term

•Lokpobiri to IOCs: It’s time to raise crude oil production

• Ojulari: Unrealistic oil output budget projection caused financial crisis in 2025

•NNPC upstream EVP wants prioritisation of high yielding projects

Emmanuel Addeh, Peter Uzoho and Blessing Ibunge in Abuja

The federal government yesterday disclosed that Nigeria cut losses associated with fuel imports by more than N6 trillion within the first nine months of 2025, attributing the sharp drop to rising domestic refining output and a sustained decline in petrol imports as well as foreign exchange reforms.

Building on the gains, the government said it was targeting local refining capacity of about 1 million barrels per day in the medium term, combining output from large-scale private refineries, modular plants and rehabilitated state-owned facilities.

The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Saidu Mohammed, stated this in a keynote address themed: “Driving Nigeria’s Downstream Renaissance: Regulation, Investment, and Market Confidence“, at the ongoing 2026 Nigerian International Energy Summit (NIES) in Abuja.

Mohammed said the cumulative impact of policy reforms under the Petroleum Industry Act (PIA) including the removal of price controls, harmonisation of the foreign exchange market, expanded use of gas and the increasing trade of crude oil and petroleum products in naira, had drastically reduced the country’s dependence on imported fuel.

According to him, the reforms had eliminated structural inefficiencies that for decades drained public finances and undermined investor confidence.

He noted that Nigeria’s downstream value chain, once characterised by chronic product scarcity, weak infrastructure, poor safety records and underinvestment, was undergoing a fundamental transformation driven by regulation, private capital and market-based pricing.

Central to the shift, Mohammed said, was the rapid growth in domestic refining capacity, led by the 650,000 barrels per day Dangote Petroleum Refinery, stressing that the facility was already meeting a significant share, and in some cases all, of Nigeria’s domestic demand for key petroleum products.

“The capacity for enhanced domestic supply of petroleum products in Nigeria will continue to grow as the planned investments in our refinery sector matures. We are optimistic that the issued Licences to Establish (LTEs) refineries which are being progressed through various levels of completion, coupled with the rehabilitation of the NNPC refineries will improve the overall installed refining capacity in Nigeria to well over 1 million bpd in the medium term.

“The bold economic reforms of  President Bola Ahmed Tinubu have created the renaissance that the downstream sector is enjoying and would continue to leverage upon for sustained sectoral growth in the future.

“The cumulative impact of the full deregulation of the downstream sector; the harmonisation of the forex market; the incentivisation and deepening the use of gas and the trading of crude and product in Naira has reduced the fiscal economic losses of importing petroleum product by over N6 trillion in the 1st nine months in 2025,” Mohammed added.

Beyond refining, the NMDPRA chief highlighted the growing role of natural gas in reshaping Nigeria’s energy landscape. He said strategic investments in gas infrastructure, supply and demand development were helping position gas as a cleaner and more affordable alternative fuel for power generation, transportation and industrial use, while also supporting broader economic diversification.

Mohammed stressed that infrastructure expansion alone would not sustain the downstream revival without credible regulation. He said investor confidence depended on clear rules, transparent institutions and predictable enforcement.

According to him, attracting the long-term private capital required to fund refineries, pipelines, depots, gas infrastructure and retail networks depended on consistent and credible regulation.

Also speaking, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, called on International Oil Companies (IOCs) operating in Nigeria to take concrete steps to ramp up crude oil production, amid a target of  2.5 million barrels per day by 2027.

The minister stated that with the government having created an enabling environment for oil companies to operate effectively, the performance of the petroleum industry remains fundamentally tied to the success of upstream operators.

He said: “I have always maintained that the success of the oil and gas industry is largely dependent on the success of the upstream. From upstream to midstream and downstream, everything is connected. If we do not produce crude oil, there will be nothing to refine and nothing to distribute. Therefore, the success of the petroleum sector begins with the success of the upstream.

“I am also happy with the team I have had the privilege to work with, a community of committed professionals. From the government’s standpoint, it is important to state clearly that there is no discrimination between indigenous producers and other operators.

“You are all companies operating in the same Nigerian space, under the same law. The PIA does not differentiate between local and foreign companies. While you may operate at different scales, you are governed by the same regulations. Our expectation, therefore, is that we will continue to work together, collaborate, and strengthen the upstream sector for the benefit of all Nigerians.”

During a fireside chat, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPC Ltd), Mr. Bayo Ojulari argued that the financial crisis suffered by Nigeria in 2025 was due to over-projection of daily crude oil production in the national budget.

The government pegged crude output figure in the 2025 budget at 2.06 million barrels per day (bpd). The NNPC  chief also assured that both the 1.8 million bpd in the budget and the NNPC’s target of 2 million barrels output per day were achievable..

Ojulari explained that the crisis happened because both the oil price and production were lower even when the parastatals had already made projections based on the output plan.

“One of the financial problems that Nigeria went into last year was because of that over-projection. We over-projected the production. Hence, we overprojected the revenue. So we ran into a crisis by the middle of the year. Not only was our price lower, our production was also lower. Meanwhile, each parastatal had already made projections based on those plans.

“So those things have far-reaching consequences, and I think having a credible plan should not just be seen as a tick in the box. We all need to ensure that we have a credible plan. Now, for us as NNPC, we are also quite vulnerable”, he said.

He advised that people should always separate political numbers from aspirations and from plans when talking about Nigeria’s oil production. “So everytime anybody mentions any number, please check who they are for empirical facts.

“Because you don’t need to challenge them, but you have to check, because we all play different roles. Politicians have their roles. Without them, we cannot be here. There are aspirations because of where you want to get to, and there is a plan. One of the things I’m most proud of about the current NNPC leadership, is that for the first time, the government’s plan for the next three years is based on our submission.

“And I will give you some of that. Last year, after we came in, of course, we did know that there were aspirational targets. That’s what I would call them. But they were not necessarily the plan, by my interpretation of a 2.06 million barrels, how the interpretations of that predated my arrival. So when I came in, of course, we quickly looked together with my leadership team and went to our board to say, look, we cannot deliver this plan.

“We can’t see the building blocks that are at the store. And we immediately, within a month, submitted a revised plan on a monthly basis for the rest of 2025 to say, this is what we can do. That revised plan was 1.703 or so,” he stated, noting that the NNPC delivered an average of about 1.7 million bpd at the end of 2025.

In the downstream, he said the company is currently in talks with partners with proven track record of refining and petrochemical operations, in order to build sustainable, self-financing, and profitable solutions for its refineries.

“Getting refineries up and running requires three critical elements: financing, a competent EPC contractor, and world-class operational capacity. That is exactly our focus at the moment,” he noted.

In his intervention during a panel session, the Executive Vice President (EVP), Upstream, at the NNPC, Udobong Ntia noted that the energy sector is speedily moving beyond attracting capital to expanding what is already available, stressing that there’s the need to prioritise high yielding projects.

He noted that the present government at the centre has ensured stability in the energy industry, pushing for a stable environment that encourages businesses and attracts companies for investment.

“We’re going to be seeing a lot of Final Investment Decisions (FIDs) in the next few months and years as we go forward. Nigeria is attracting capital. We are going beyond attracting the capital to expending the capital judiciously and making sure we make a profit at the end of the day.

“We’re prioritising our portfolio. My idea is to ensure we’re chasing after where we’re going to get the biggest interest from, so it’s not just so much that I’m looking at a project and I’m pouring money into it,” he explained.