President Bola Tinubu has approved the immediate implementation of a 15 per cent ad-valorem import duty on petrol and diesel, a move aimed at protecting Nigeria’s burgeoning local refining industry but is expected to lead to an increase in fuel pump prices across the country.
The directive was conveyed in a letter dated October 21, 2025, addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The letter, signed by the President’s Private Secretary, Damilotun Aderemi, greenlit a proposal from FIRS Chairman Zacch Adedeji to introduce a “market-responsive import tariff framework.”
In his proposal to the President, Adedeji explained that the new tariff is a critical component of the administration’s reforms designed to boost domestic refining, ensure price stability, and strengthen the naira-based oil economy.
“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 warned that a “misalignment” between the pricing of locally refined products and the cost of imported fuel has created market instability. According to the FIRS boss, the benchmark for setting pump prices—import parity pricing—often falls below the cost-recovery level for local producers, putting emerging domestic refineries under significant financial pressure.
Adedeji argued that the government has a “twofold” responsibility: “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 new 15 per cent duty is designed to discourage duty-free imports from undercutting local refiners and to foster a more competitive downstream sector.
Impact on Pump Prices
The introduction of the tariff is projected to have a direct impact on consumers’ wallets. According to projections included in the memo, the 15 per cent duty could increase the landing cost of petrol by an estimated N99.72 per litre.
This policy decision comes as Nigeria makes a concerted effort to wean itself off petroleum product importation. The 650,000 barrels-per-day Dangote Refinery has recently commenced production of diesel and aviation fuel, while several modular refineries have also come on stream. Despite these advancements, imported petrol still accounts for as much as 67 per cent of the nation’s total demand.
