Tinubu Okays 15% Import Duty on Petrol, Diesel

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By Odekunle Doyin

President Bola Ahmed Tinubu has approved the implementation of a 15 per cent ad-valorem import duty on petrol and diesel imported into Nigeria, a major policy shift aimed at protecting local refineries and stabilizing the downstream oil market.

The new directive, contained in a presidential memo dated October 21, 2025, and made public on Wednesday, mandates the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to commence immediate enforcement of the tariff.

The decision, according to the presidency, forms part of a market-responsive import tariff framework designed to align pricing, encourage local production, and promote energy security under the Renewed Hope Agenda.

Policy Backed by Economic Rationale

The approval was based on a proposal from FIRS Chairman Zacch Adedeji, who noted that the policy will help balance market forces and protect domestic producers from unfair pricing practices.

“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 explained that while domestic refining of diesel has reached sufficiency and petrol production is rising, market volatility persists due to a “misalignment” between local refiners and fuel importers.

Adedeji also warned that import parity pricing often undermines cost recovery for local producers, especially when foreign exchange and shipping costs fluctuate.

“Duty-free fuel imports have the potential to cripple emerging refineries. This tariff will help sustain local operations and ensure fair competition,” he added.

Expected Impact on Prices

Government projections show that the 15 per cent duty could raise the landing cost of petrol by about ₦99.72 per litre, bringing import parity closer to domestic production costs.

Even with the increase, the estimated Lagos pump price would hover around ₦964.72 per litre ($0.62) — still below the regional average prices of $1.76 in Senegal, $1.52 in Côte d’Ivoire, and $1.37 in Ghana.

Officials believe the tariff adjustment will not trigger an immediate hike in pump prices but will instead stabilize supply and ensure cost recovery for local refiners such as Dangote Refinery and modular plants in Edo, Rivers, and Imo States.

Part of Broader Local Refining Push

Nigeria currently imports about 67 per cent of its petrol consumption, despite the gradual rise in domestic output. The government hopes the tariff reform will accelerate the country’s transition toward self-sufficiency in fuel production.

The Dangote Refinery in Lagos has already begun producing diesel and aviation fuel, while several modular refineries are stepping up small-scale petrol refining.

The new import duty, government sources said, will “level the playing field” between importers and refiners, encourage local investments, and advance Tinubu’s broader plan for energy security and economic stability.