President Bola Tinubu has approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel imported into Nigeria. The move, which takes immediate effect, is positioned as part of government efforts to protect local refineries, stabilise the downstream oil market, and strengthen the naira-based economy. However, it is expected to result in a rise in pump prices.
The approval was contained in a letter dated October 21, 2025, and publicly reported on October 30, 2025. The letter, signed by Damilotun Aderemi, the President’s Private Secretary, was addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). It followed a proposal by Zacch Adedeji, Executive Chairman of the FIRS, who recommended the new tariff under a “market-responsive import tariff framework.”
Adedeji explained that the 15 per cent duty, applied on the cost, insurance, and freight (CIF) value of imported petrol and diesel, is designed to align import costs with domestic market realities. The measure, he said, forms part of ongoing reforms aimed at boosting local refining, stabilising prices, and promoting fiscal sustainability under the administration’s 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 in his memo to the President.
He warned that the current pricing imbalance between locally refined products and imported fuel had created instability in the downstream market. “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 noted.
According to Adedeji, import parity pricing, the benchmark used to set pump prices—often falls below cost-recovery levels for local producers, especially during periods of foreign exchange volatility and rising freight costs. This, he said, puts emerging domestic refineries at a disadvantage.
The FIRS chairman added that government’s role is “twofold, to protect both consumers and domestic producers from unfair pricing practices while ensuring a level playing field for refiners to recover costs and attract new investments.”
He argued that the 15 per cent import duty would discourage duty-free imports that undercut local refiners and promote a more competitive downstream market.
Projections in the memo indicated that the new tariff could increase 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 brings imported landed costs closer to local cost-recovery levels without inflating consumer prices beyond sustainable thresholds,” the document stated.
Even with this adjustment, Lagos pump prices are expected to hover around ₦964.72 per litre ($0.62), still lower than regional averages such as Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37).
The new policy comes as Nigeria intensifies efforts to reduce dependence on imported petroleum products and expand domestic refining capacity. The 650,000-barrel-per-day Dangote Refinery in Lagos has begun producing diesel and aviation fuel, while modular refineries in Edo, Rivers, and Imo States have started small-scale petrol refining.
Despite these developments, petrol imports still account for about 67 per cent of national demand, underscoring the urgency of measures to support local refining and achieve long-term energy security.
