President Bola Tinubu has given his approval for the introduction of a 15 per cent ad-valorem import duty on petrol and diesel brought into Nigeria.
The move is designed to protect local refineries and stabilise the downstream oil market, although it may lead to an increase in pump prices.
In a letter dated October 21, 2025, and made public on October 30, 2025, Tinubu directed the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to immediately implement the tariff as part of a “market-responsive import tariff framework.”
The letter, signed by his Private Secretary, Damilotun Aderemi, conveyed the President’s approval following a proposal by the Executive Chairman of the FIRS, Zacch Adedeji.
The 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 measure is part of ongoing reforms to enhance local refining, promote price stability, and strengthen Nigeria’s oil economy within the framework of the Renewed Hope Agenda for energy security and fiscal sustainability.
“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 also cautioned that the current gap between locally refined products and import parity pricing has led to persistent 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 added.
Adedeji further explained that import parity pricing — the standard for determining pump prices — often falls below cost recovery levels for local producers, especially during foreign exchange and freight fluctuations, which in turn pressures emerging domestic refineries.
According to him, the government’s task is 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.”
He argued that the new tariff framework would discourage duty-free fuel imports from undercutting domestic producers and promote a fair, competitive downstream environment.
Projections in the letter indicate that the 15 per cent duty 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 ₦964.72 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 document noted.
The policy comes as Nigeria ramps up efforts to reduce reliance on imported petroleum products and boost 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 production.
Despite these developments, however, petrol imports still make up about 67 per cent of national demand.