President Bola Ahmed Tinubu has approved a new 15 percent ad-valorem import duty on petrol and diesel as part of fiscal reforms aimed at stabilising Nigeria’s downstream sector and protecting domestic refining.
The approval, contained in a letter dated October 21, 2025, and made public on October 30, 2025, directed the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to begin immediate implementation.
The directive followed a proposal by Dr. Zacch Adedeji, Executive Chairman of the FIRS, who described the tariff as a “market-responsive import framework” designed to align import prices with domestic refining realities. The 15 percent duty will be levied on the Cost, Insurance, and Freight (CIF) value of imported fuels.
Adedeji explained that the measure would strengthen local refining capacity, support crude transactions in local currency, and ensure stable and affordable fuel supply. He noted that duty exemptions on imported products had distorted domestic pricing, discouraging local refiners.
To correct this, he said, the new policy will create “a level playing field for refiners to recover costs and attract investments,” while curbing unfair competition in the market.
Documents accompanying the approval project that the tariff could raise the landing cost of petrol by ₦99.72 per litre, pushing Lagos pump prices to about ₦964.72 ($0.62). Despite this increase, prices would remain below regional averages: Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37) indicating Nigeria’s continued lower domestic pricing.
The move comes as Nigeria intensifies efforts to cut reliance on fuel imports. The 650,000 barrels-per-day Dangote Refinery has started producing diesel and aviation fuel, while smaller modular refineries in Edo, Rivers, and Imo States are refining petrol. However, imports still supply about 67 percent of national demand.
Government officials believe the duty will shield local refiners from being undercut by cheaper imports and encourage expansion. Adedeji stressed that the government’s role is “to protect consumers and domestic producers from unfair pricing and ensure a competitive environment.”
Analysts say the measure, though likely to cause modest pump price adjustments, is vital for long-term fiscal sustainability, energy self-sufficiency, and naira stability by reducing forex demand for imports.
The 15 % duty underscores Tinubu’s broader economic reform agenda promoting energy independence, fiscal discipline, and a competitive domestic market while pledging transparency and collaboration with industry stakeholders during implementation.
