Tinubu Approves 15% Import Duty on Petrol, Diesel to Support Local Refining
President Bola Tinubu has authorized the implementation of a 15% ad-valorem import duty on petrol and diesel brought into Nigeria, a move aimed at strengthening domestic refining and stabilizing the downstream petroleum market. However, the policy is expected to result in higher pump prices.
The directive was contained in a letter dated October 21, 2025, and made public on October 30. Addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the letter instructed immediate enforcement of the new tariff under what the government termed a “market-responsive import tariff framework.”
Signed by Tinubu’s Private Secretary, Damilotun Aderemi, the letter confirmed the President’s approval following a proposal from FIRS Executive Chairman, Zacch Adedeji. The proposal recommended applying the 15% duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel to better align import costs with domestic production realities.
In his memo, Adedeji explained that the measure is part of broader reforms under the Renewed Hope Agenda, designed to enhance energy security, promote fiscal sustainability, and encourage crude transactions in naira. He emphasized that the initiative would help stabilize prices and support emerging local refineries.
“Domestic petrol refining is on the rise, and diesel sufficiency has been achieved, yet price instability persists due to disparities between local production costs and import parity pricing,” Adedeji noted. He warned that these misalignments, exacerbated by foreign exchange volatility and freight costs, threaten the viability of domestic refineries.
He further stated that the government must protect both consumers and producers from unfair pricing and market manipulation, while ensuring refiners can recover costs and attract investment.
The new tariff is expected to discourage duty-free fuel imports that undercut local producers and foster a more competitive downstream sector. Projections in the letter estimate that the 15% duty could raise the landing cost of petrol by approximately ₦99.72 per litre.
Despite the increase, pump prices in Lagos are projected to remain around ₦964.72 per litre ($0.62), which is still lower than regional averages, Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37).
The policy comes as Nigeria intensifies efforts to reduce reliance on imported fuel. The 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. Nevertheless, imported petrol still accounts for roughly 67% of national consumption.
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