President Bola Tinubu has approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel brought into the country.
The new policy is designed to protect Nigeria’s emerging local refineries and stabilise the downstream petroleum market, though it is expected to result in a slight increase in pump prices.
In a letter dated October 21, 2025, and made public on October 30, 2025, Tinubu instructed the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to begin immediate implementation of the tariff as part of a “market-responsive import tariff framework.”
The approval, conveyed through his Private Secretary, Damilotun Aderemi, followed a proposal submitted by the Executive Chairman of the FIRS, Zacch Adedeji.
The FIRS proposal recommended a 15 per cent duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel to align import prices with domestic market realities.
Adedeji, in his memo to the President, explained that the move formed part of ongoing economic reforms aimed at enhancing local refining, ensuring price stability, and strengthening Nigeria’s oil-based economy under the Renewed Hope Agenda.
“The core objective of this initiative is to operationalise crude transactions in local currency, strengthen local refining capacity, and ensure a stable, affordable supply of petroleum products across Nigeria,” Adedeji stated.
He warned that the existing mismatch between locally refined products and import parity pricing had caused market instability.
“While domestic refining of petrol has begun to increase and diesel sufficiency has been achieved, price instability persists, partly due to the misalignment between local refiners and marketers,” he wrote.
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Adedeji added that import parity pricing, which is the benchmark for determining pump prices, often falls below cost recovery levels for local producers, especially during foreign exchange and freight fluctuations. This, he said, has created pressure on domestic refineries.
He emphasised that the government’s role was now “twofold, to protect consumers and domestic producers from unfair pricing practices and collusion, while ensuring a level playing field for refiners to recover costs and attract investments.”
According to him, the new import duty will discourage duty-free fuel imports from undercutting local refiners and promote a more competitive downstream market.
Projections in the approved document show that the 15 per cent tariff could raise the landing cost of petrol by about ₦99.72 per litre.
“At current CIF levels, this represents an increment of approximately 99.72 per litre, which nudges imported landed costs toward local cost-recovery without choking supply or inflating consumer prices beyond sustainable thresholds. Even with this adjustment, estimated Lagos pump prices would remain in the range of N964.72 per litre ($0.62), still significantly below regional averages such as Senegal ($1.76 per litre), Cote d’Ivoire ($1.52 per litre), and Ghana ($1.37 per litre).”
The policy aligns with ongoing national efforts to reduce reliance on imported fuels and encourage full-scale domestic refining.
While the 650,000 barrels-per-day Dangote Refinery in Lagos has started producing diesel and aviation fuel, several modular refineries in Edo, Rivers, and Imo states have also begun small-scale petrol refining. Despite these improvements, however, imported petrol still meets about 67 per cent of Nigeria’s fuel demand.
