President Bola Tinubu has approved the immediate introduction of a 15 per cent ad-valorem import duty on imported petrol and diesel, in a policy shift aimed at safeguarding Nigeria’s emerging domestic refineries and stabilising the downstream petroleum sector.
The directive, effective immediately following its circulation on October 30, 2025, was contained in a letter dated October 21, 2025, signed by the President’s Private Secretary, Damilotun Aderemi, and addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The approval followed a proposal submitted by FIRS Executive Chairman, Zacch Adedeji, who argued that the new tariff — calculated on the cost, insurance, and freight (CIF) value of imported fuel — is necessary to align import costs with domestic market realities under the administration’s Renewed Hope Agenda.
Adedeji explained that 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.”
He warned that the existing disparity between the pricing of locally refined products and import parity pricing has fuelled market instability. According to him, while Nigeria’s domestic refining capacity is growing — especially with increased diesel production — fluctuations in foreign exchange and freight rates have often pushed import parity pricing below cost recovery levels for local producers.
“The government’s responsibility is now twofold,” Adedeji stated, “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.”
The 15 per cent duty, he added, is designed to prevent duty-free imports from undercutting locally refined products and discouraging investment in Nigeria’s refining sector.
Projections in the official letter indicate that the new import duty could raise the landing cost of petrol by approximately ₦99.72 per litre. This would bring the estimated pump price in Lagos to about ₦964.72 per litre ($0.62), which remains significantly lower than the average pump prices in neighbouring countries such as Senegal ($1.76) and Ghana ($1.37).
The move comes as Nigeria intensifies efforts to reduce its reliance on imported fuel. The 650,000-barrel-per-day Dangote Refinery has already begun producing diesel and aviation fuel, while several modular refineries across the country have commenced limited petrol output.
Despite these advances, imported petrol still accounts for about 67 per cent of Nigeria’s total consumption, according to the memo.
While the policy is expected to boost local refining and promote economic self-sufficiency, analysts anticipate that the introduction of the new duty could trigger a fresh wave of fuel price increases nationwide.
