Nigeria’s oil imports fall by 35% amid policy shifts and economic adjustments

Nigeria’s oil imports dropped by 35% in Q2 2024 to $2.79bn, reflecting sector shifts post-fuel subsidy removal and ongoing economic adjustments.

Nigeria’s oil imports declined sharply by 35% in the second quarter of 2024, falling to $2.79 billion from $4.31 billion in the first quarter, according to the Central Bank of Nigeria’s (CBN) quarterly economic report.

This significant reduction mirrors structural shifts in Nigeria’s oil sector as the country continues to adjust economically following the removal of fuel subsidies under President Bola Tinubu’s administration.

Also read: Nigeria’s oil marketers record massive gains from subsidy removal

The CBN report highlighted that the broader value of merchandise imports also dropped during Q2, contracting by 20.59% to $8.64 billion from the $10.88 billion recorded in Q1 2024. This reduction in oil imports was a major factor driving the overall decline in imports.

The report stated, “Merchandise import decreased in Q2 2024, following the decline in the import of petroleum products.

Analysis by composition indicated that oil imports decreased to $2.79 billion from $4.31 billion in the preceding quarter.”

Meanwhile, non-oil imports also recorded a decline, dropping from $6.57 billion to $5.85 billion. Non-oil imports made up 67.72% of total imports, with oil imports constituting the remaining balance.

In addition to changes in import dynamics, Nigeria’s domestic crude oil production saw a decrease of 4.51% to 1.27 million barrels per day (mbpd) in Q2 2024, down from 1.33 mbpd in Q1.

The CBN report attributed this production drop to persistent oil theft and illegal refining activities in the Niger Delta, which have long posed challenges to Nigeria’s oil output stability. Declines were recorded across key production streams, including Forcados, Bonny, Qua-Iboe, Escravos, and Brass.

Despite Nigeria’s efforts, the country’s production levels fell short of its Organisation of Petroleum Exporting Countries (OPEC) quota of 1.58 mbpd by 308,000 barrels per day.

The country’s ongoing struggles with oil theft and pipeline vandalism continue to hamper its ability to reach production targets.

On the global stage, however, rising crude prices offered a glimmer of hope. The price of Bonny Light, Nigeria’s benchmark crude, rose to $86.97 per barrel in Q2 2024, providing some support to export revenues.

Crude oil and gas exports accounted for a substantial 87.38% of Nigeria’s export earnings for the quarter, although export receipts dipped slightly to $12.18 billion from $12.42 billion in Q1.

Earlier in the year, the CBN reported a total allocation of $2.97 billion to support oil sector players with the importation of petroleum products, highlighting ongoing efforts to stabilise supply within Nigeria despite external challenges.