President Bola Tinubu has approved a 15 per cent import duty on imported petrol and diesel.
The move is intended to safeguard Nigeria’s local refineries and stabilize the downstream oil market, though it is expected to lead to “likely to raise pump prices.”
The directive for the “market-responsive import tariff framework” was issued in a letter dated October 21, 2025, which became public on October 30, 2025.
The letter, sent to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, called for the “immediate implementation of the tariff.”
Signed by Tinubu’s Private Secretary, Damilotun Aderemi, the letter conveyed the President’s approval of a proposal from the Executive Chairman of the FIRS, Zacch Adedeji.
The FIRS proposal advocated for applying the 15 per cent duty to the cost, insurance, and freight (CIF) value of imported fuel to better align import expenses with domestic market realities.
Adedeji explained in his memo that this measure forms part of the administration’s broader reforms, aligning with the “Renewed Hope Agenda for energy security and fiscal sustainability.”
The goal is to strengthen the naira-based oil economy, stabilize prices, and boost local refining. Adedeji explicitly stated, “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.”
The FIRS boss warned that the existing financial imbalance between imported and locally refined products causes market instability.
He wrote that although “domestic refining of petrol has begun to increase and diesel sufficiency has been achieved,” price volatility continues, due partly to “the misalignment between local refiners and marketers.”
Adedeji noted that the current use of import parity pricing (the standard for setting pump prices) often results in costs below what is necessary for local producers to recover their expenses, especially amidst fluctuations in foreign exchange and freight costs.
This, he argued, places stress on Nigeria’s developing domestic refineries.
He concluded that the government’s role 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.”
The new tariff, he stressed, would curb duty-free fuel imports from undermining domestic producers, fostering a more competitive downstream sector.
Projections included in the President’s letter indicate that the 15 per cent import duty could increase the landing cost of petrol by approximately $\text{₦99.72}$ per litre.
The letter provided context for this increase, stating : “At current CIF levels, this represents an increment of approximately 99.72 per litre, which nudges imported landed costs toward local cost-recovery without choking supply or inflating consumer prices beyond sustainable thresholds.
“Even with this adjustment, estimated Lagos pump prices would remain in the range of $\text{₦964.72}$ per litre ($\$0.62$), still significantly below regional averages such as Senegal ($\$1.76$ per litre), Cote d’Ivoire ($\$1.52$ per litre), and Ghana ($\$1.37$ per litre).”
The new policy supports ongoing national efforts to decrease reliance on imported petroleum.
While the Dangote Refinery has commenced production of diesel and aviation fuel, and various modular refineries are refining small amounts of petrol, the country still depends on petrol imports for up to 67 per cent of its national demand.
(vitalnewsngr.com)
