In a decisive policy move aimed at reshaping Nigeria’s downstream oil sector, President Bola Tinubu has approved the introduction of a 15% import duty on petrol and diesel.
The new tariff, which takes immediate effect, is expected to protect local refineries, stabilise fuel prices, and support the Federal Government’s goal of energy self-sufficiency.
According to a presidential directive dated October 21, 2025, and made public on October 30, the measure forms part of a “market-responsive import tariff framework” designed to align Nigeria’s petroleum pricing with domestic production realities.
The directive, signed by Tinubu’s Private Secretary, Damilotun Aderemi, was issued to both the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
New 15% Import Duty on Petrol and Diesel Targets Market Stability
The 15% import duty on petrol and diesel follows a proposal submitted by the Executive Chairman of the FIRS, Zacch Adedeji, outlining the need to regulate import costs and encourage the growth of domestic refineries.
In his memo to the President, Adedeji explained that the new framework seeks to eliminate unfair market competition, enhance local refining capacity, and strengthen the naira’s role in crude oil transactions.
“The objective of this initiative,” Adedeji said, “is to operationalise crude transactions in local currency, strengthen local refining, and ensure a stable, affordable supply of petroleum products nationwide.”
He further highlighted that despite improvements in domestic refining, market instability persists due to the misalignment between local and imported product pricing.
According to him, the introduction of a 15% ad-valorem import duty will help narrow the cost gap between imported and locally refined fuel, making the market more predictable for investors.
Impact on Fuel Prices and Regional Competitiveness
Government estimates suggest that the 15% import duty on petrol and diesel could increase the landing cost of petrol by approximately ₦99.72 per litre.
This adjustment brings the Lagos retail price to about ₦964.72 per litre—still significantly lower than regional averages. In comparison, fuel prices remain higher in neighbouring countries such as Senegal ($1.76 per litre), Côte d’Ivoire ($1.52), and Ghana ($1.37).
According to the FIRS analysis, the policy strikes a balance between safeguarding consumers from excessive price hikes and ensuring that local refiners can recover production costs.
“Even with this modest tariff, Nigerian pump prices remain among the lowest in West Africa,” Adedeji said.
Economists and energy analysts have described the move as a bold attempt to correct market distortions caused by duty-free imports and foreign exchange volatility.
However, they warn that unless the government enforces effective oversight, importers may pass on the additional costs to consumers, worsening the burden on households.
Boosting Domestic Refining and Energy Security
The approval of a 15% import duty on petrol and diesel aligns with Tinubu’s Renewed Hope Agenda, which prioritises energy security and fiscal reforms.
The administration aims to reduce Nigeria’s heavy reliance on imported petroleum products by supporting the expansion of local refineries.
Currently, the 650,000 barrels-per-day Dangote Refinery in Lagos has begun producing diesel and aviation fuel, while smaller modular refineries in Edo, Rivers, and Imo states are refining limited volumes of petrol.
Despite these advances, the country still imports about 67% of its petrol demand, making it vulnerable to global oil price shocks and foreign exchange fluctuations.
Industry stakeholders believe the import duty will make local refining more attractive to investors by discouraging cheap imports that undercut domestic production.
“This is a strategic move to encourage the growth of our refining base and reduce capital flight through fuel imports,” said a senior executive in the oil and gas sector who spoke on condition of anonymity.
Government’s Broader Reform Agenda
Beyond the 15% import duty on petrol and diesel, the Federal Government is implementing a series of fiscal reforms aimed at restoring balance to Nigeria’s oil-dependent economy.
These include promoting local crude oil trading in naira, tightening oversight of fuel marketers, and incentivising investment in energy infrastructure.
The administration also hopes the tariff will create a more transparent pricing regime and end the recurring controversy over subsidy-related losses.
Officials insist that while the duty may slightly affect pump prices, the long-term benefit of stabilising the downstream market far outweighs short-term discomfort.
“The government’s role is to protect both consumers and local producers from unfair pricing while ensuring a competitive environment that attracts investment,” Adedeji added.
Public Reactions and Concerns
Public response to the 15% import duty on petrol and diesel has been mixed.
While some industry players welcome the reform as a long-overdue step toward energy independence, consumer rights groups fear the policy could push up transport and food costs.
The Nigerian Labour Congress has also expressed concerns that the adjustment might exacerbate inflationary pressures already affecting citizens.
Nonetheless, government officials argue that the policy will gradually lead to lower prices as more refineries come onstream and competition deepens. They insist the long-term benefits include a stronger naira, better job creation, and improved fiscal sustainability.
President Tinubu’s approval of a 15% import duty on petrol and diesel marks a defining step in Nigeria’s journey toward refining independence and energy stability.
The policy underscores the government’s determination to align domestic fuel pricing with production realities, encourage private investment, and secure the nation’s energy future.
While immediate challenges may arise, the reform sets the foundation for a more resilient, transparent, and self-sufficient petroleum market.
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