President Bola Tinubu has approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel imports into Nigeria.
The new tariff, which aims to protect local refineries and stabilise the downstream petroleum market, is expected to impact pump prices nationwide.
In a letter dated October 21, 2025, and made public on October 30, Tinubu directed the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to begin immediate implementation of the policy under what the government described as a “market-responsive import tariff framework.”
The directive, conveyed through a letter signed by the President’s Private Secretary, Damilotun Aderemi, followed a proposal submitted by FIRS Executive Chairman Zacch Adedeji.
Adedeji’s proposal recommended applying a 15 per cent duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel to align import costs with domestic market realities.
In his memo to the President, Adedeji explained that the initiative is part of ongoing energy sector reforms designed to strengthen local refining, stabilise prices, and promote the use of the naira in crude oil transactions in line with the administration’s Renewed Hope Agenda for energy security and fiscal sustainability.
“The goal is to promote crude oil transactions in local currency, boost domestic refining capacity, and maintain a stable and affordable supply of petroleum products nationwide,” Adedeji stated.
He noted that the current gap between local refining costs and import parity pricing has contributed to instability in the downstream market.
“Although domestic refining of petrol is increasing and diesel sufficiency has been achieved, price instability persists due to the misalignment between local refiners and marketers,” he wrote.
According to Adedeji, import parity pricing—the benchmark used to determine retail prices—often falls below cost-recovery levels for local producers, especially during fluctuations in foreign exchange and shipping costs. This, he said, places pressure on emerging domestic refineries.
He stressed that the government must “protect both consumers and domestic producers from unfair pricing practices while creating a level playing field that allows local refiners to recover costs and attract investment.”
The FIRS chairman added that the new tariff policy would discourage duty-free fuel imports that undercut local producers and foster a fair, competitive downstream market.
Projections in the letter estimate that the 15 per cent import duty could raise the landing cost of petrol by approximately ₦99.72 per litre.
“At current CIF levels, this adjustment increases the landed cost of imported fuel without driving prices beyond sustainable levels. Even with the new tariff, pump prices in Lagos are expected to remain around ₦964.72 per litre ($0.62), which is still below regional averages such as Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37),” the document stated.
The policy comes as Nigeria intensifies efforts to cut dependence on imported petroleum products and expand domestic refining capacity.
The 650,000-barrels-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 Nigeria’s total fuel consumption.
