Tinubu Approves 15% Import Duty on Petrol, Diesel to Protect Local Refineries

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President Bola Tinubu has approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel imports into Nigeria — a move aimed at protecting local refineries and stabilising the downstream petroleum market.

The new tariff, which is expected to raise pump prices, takes effect immediately.

According to 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 implementation under a new “market-responsive import tariff framework.”

The directive, signed by the President’s Private Secretary, Damilotun Aderemi, followed a proposal by the Executive Chairman of FIRS, Dr. Zacch Adedeji, seeking to realign import costs with domestic market realities.

Boosting Local Refining and Fiscal Stability

In his memo to the President, Adedeji explained that the new duty is part of broader reforms to strengthen Nigeria’s refining sector, stabilise fuel prices, and promote the use of the naira in crude oil transactions.

“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 noted that while domestic refining of petrol is on the rise and diesel sufficiency has been achieved, price volatility persists due to “misalignment between local refiners and marketers.”

Adedeji warned that import parity pricing — often used to determine pump prices — sometimes falls below recovery levels for local producers, especially during foreign exchange or freight fluctuations, thereby undermining emerging refineries.

“The government’s responsibility is twofold: to protect consumers and domestic producers from unfair pricing practices, while ensuring a level playing field that attracts investment,” he added.

Expected Price Impact

According to projections in the letter, the 15 per cent duty could increase the landing cost of petrol by about ₦99.72 per litre.

At current Cost, Insurance, and Freight (CIF) levels, this would place estimated Lagos pump prices at ₦964.72 per litre ($0.62) — still below regional averages, such as Senegal ($1.76/litre), Côte d’Ivoire ($1.52/litre), and Ghana ($1.37/litre).

Government officials say the adjustment is designed to “nudge imported costs toward local cost recovery without choking supply or inflating prices beyond sustainable thresholds.”

Nigeria Pushes for Energy Independence

The new tariff framework comes as Nigeria intensifies efforts to reduce fuel import dependence and boost domestic refining.

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 limited-scale petrol refining.

Despite this progress, petrol imports still account for about 67 per cent of national consumption.