Photo File: President Bola Tinubu

President Bola Tinubu has approved the implementation of a 15 per cent ad-valorem import duty on petrol and diesel brought into Nigeria — a policy aimed at protecting domestic refineries and stabilising the downstream oil market.

In a directive dated October 21, 2025, and made public on Wednesday, the president instructed the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to immediately begin enforcing the tariff.

According to the government, the decision is part of a new “market-responsive import tariff framework” designed to align Nigeria’s fuel pricing system with current market realities.

The approval, conveyed in a letter signed by the President’s Private Secretary, Damilotun Aderemi, endorsed a proposal from FIRS Chairman Zacch Adedeji. The plan introduces a 15 per cent duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel to reflect actual import costs and encourage local production.

Adedeji explained that the initiative supports the Tinubu administration’s Renewed Hope Agenda for energy security and economic stability.

“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,” he stated.

The FIRS chief noted that the price gap between locally refined products and import parity levels has contributed to market instability.

“While domestic petrol refining is rising and diesel sufficiency has been achieved, price volatility persists, partly because of the misalignment between local refiners and marketers,” Adedeji wrote.

He warned that import parity pricing often falls below cost recovery levels for domestic refiners, especially amid foreign exchange and freight fluctuations — a challenge that could threaten the viability of emerging local producers.

Adedeji added that the government has a dual responsibility: to protect consumers and producers from unfair pricing and collusion while ensuring refiners can recover costs and attract investment.

According to him, the new tariff system will prevent duty-free imports from undercutting local refineries and promote a fair, competitive downstream environment.

Projections included in the presidential approval indicate that the 15 per cent duty could raise the landing cost of petrol by about ₦99.72 per litre.

“At current CIF levels, this represents an increment of roughly ₦99.72 per litre — a moderate adjustment that aligns import costs with local production without triggering unsustainable price hikes,” the document stated.

Even with the new tariff, estimated Lagos pump prices are expected to remain around ₦964.72 per litre ($0.62), still well below regional averages such as Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37) per litre.

The move aligns with Nigeria’s broader efforts to reduce dependence on imported petroleum products and boost domestic refining capacity.

The 650,000-barrels-per-day Dangote Refinery in Lagos has already begun producing diesel and aviation fuel, while modular refineries in Edo, Rivers, and Imo states have started small-scale petrol refining.

Despite these advances, imported petrol still accounts for about 67 per cent of Nigeria’s total consumption.