President Bola Ahmed Tinubu has approved the introduction of a 15 percent import duty on petrol and diesel as part of his administration’s efforts to protect local refineries, strengthen the downstream petroleum sector, and stabilise fuel prices across the country.
The policy, which takes effect immediately, was contained in a letter dated October 21, 2025, addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The letter, signed by the President’s Private Secretary, Damilotun Aderemi, confirmed Tinubu’s approval following a formal proposal from FIRS Executive Chairman, Zacch Adedeji.
The 15 percent ad-valorem tariff calculated on the cost, insurance, and freight (CIF) value of imported petrol and diesel—aims to align import prices with domestic market realities. According to the proposal, the policy is designed to encourage local refining, reduce dependence on imports, and build a stronger, naira-based oil economy under the Renewed Hope Agenda.
Adedeji, in his memo to the President, explained that the initiative was part of a broader reform to promote price stability, energy security, and fiscal sustainability.
“The core objective of this initiative,” he stated, “is to strengthen local refining capacity, operationalise crude transactions in local currency, and ensure a steady, affordable supply of petroleum products across the nation.”
While Nigeria has recently made progress in refining capacity especially with the commencement of diesel and aviation fuel production at the Dangote Refinery and the operation of modular refineries in Edo, Rivers, and Imo States the FIRS boss warned that price misalignment between imported and locally refined products continues to threaten market stability.
“Although local refining is improving, price instability persists,” Adedeji said. “This is largely due to the misalignment between domestic refiners and marketers, where import parity pricing often falls below cost recovery levels for local producers.”
He stressed that this imbalance has discouraged investment and placed undue pressure on new refineries trying to achieve profitability in the face of volatile foreign exchange rates and freight costs.
The new tariff policy seeks to strike a balance between protecting consumers from price exploitation and ensuring that domestic producers can compete fairly.
“The government’s responsibility is twofold,” Adedeji noted. “We must safeguard consumers and producers from unfair pricing practices and collusion, while maintaining a competitive environment that rewards efficiency and innovation.”
He added that the import duty would prevent duty-free imports from undermining local production, thereby fostering a fairer, more competitive downstream market.
According to government projections, the introduction of the 15 percent duty could raise the landing cost of petrol by approximately ₦99.72 per litre. However, officials maintain that this would not result in excessive price hikes for consumers.
“At current CIF levels, the adjustment brings imported landing costs closer to local cost recovery,” the document explained. “Even with this change, estimated Lagos pump prices will remain around ₦964.72 per litre ($0.62), significantly below regional averages — Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37).”
This pricing, the government argues, ensures Nigeria remains competitive in the West African fuel market while creating room for sustainable growth in domestic refining.
The new import duty reflects the federal government’s determination to reduce dependence on imported petroleum products and move Nigeria toward energy self-sufficiency. Despite ongoing progress, petrol imports still make up about 67 percent of national demand.
By introducing the tariff, the Tinubu administration hopes to give local refineries the needed support to expand capacity, stabilise production, and contribute meaningfully to national economic growth.
Ultimately, the policy underscores the President’s broader vision to create a resilient, competitive, and self-reliant oil sector that supports the nation’s fiscal and energy goals for long-term stability.
