President Bola Tinubu has sanctioned the implementation of a 15% ad valorem import duty on petrol and diesel imports to Nigeria.
This measure is designed to safeguard local refineries and stabilise the downstream market, although it is anticipated to lead to higher pump prices.
In a letter dated 21 October 2025 and made public on 30 October 2025, addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Tinubu instructed the immediate execution of the tariff as part of what the government has termed a “market-responsive import tariff framework.”
The letter, signed by his Private Secretary, Damilotun Aderemi, and obtained by our correspondent on Wednesday, communicated the President’s approval following a proposal from Zacch Adedeji, the Executive Chairman of the FIRS.
This proposal recommended the application of a 15% duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel, aiming to align import expenses with the realities of the domestic market.
In his memorandum to the President, Adedeji outlined that this initiative is part of ongoing reforms intended to enhance local refining, ensure price stability, and fortify the naira-based oil economy, in alignment with the administration’s Renewed Hope Agenda for energy security and fiscal sustainability.
“The primary aim of this initiative is to operationalise crude transactions in local currency, bolster local refining capacity, and ensure a stable and affordable supply of petroleum products throughout Nigeria,” stated Adedeji.
The FIRS Chairman also cautioned that the current disparity between locally refined products and import parity pricing has resulted in market instability.
“While domestic petrol refining has begun to increase and diesel sufficiency has been achieved, price instability remains a challenge, partly due to the misalignment between local refiners and marketers,” he wrote.
He noted that import parity pricing, the benchmark for determining pump prices, often falls short of recovery levels for local producers, especially during fluctuations in foreign exchange and freight, placing significant pressure on emerging domestic refineries.
Adedeji further asserted that the government’s responsibility 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 contended that the new tariff framework would discourage duty-free fuel imports from undermining domestic producers and promote a fair and competitive downstream market.
According to projections within the letter, the 15% import duty could raise the landing cost of petrol by an estimated ₦99.72 per litre.
“At current CIF levels, this represents an increase of approximately ₦99.72 per litre, bringing imported landed costs closer to local cost recovery without stifling supply or inflating consumer prices beyond sustainable limits. Even with this adjustment, estimated pump prices in Lagos would remain around ₦964.72 per litre ($0.62), still considerably lower than regional averages such as Senegal ($1.76 per litre), Côte d’Ivoire ($1.52 per litre), and Ghana ($1.37 per litre).”
This policy emerges as Nigeria intensifies its efforts to diminish reliance on imported petroleum products and enhance domestic refining capabilities.
The 650,000 barrels-per-day Dangote Refinery in Lagos has commenced production of diesel and aviation fuel, while modular refineries in Edo, Rivers, and Imo states have initiated small-scale petrol refining.
Nevertheless, despite these advancements, petrol imports continue to account for up to 67% of the national demand.
