President Bola Tinubu has approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel imported into Nigeria.

The policy is designed to protect local refineries, promote market stability in the downstream sector, and support ongoing reforms in the petroleum industry. However, the move may lead to a rise in pump prices across the country.

In a letter dated October 21, 2025, and made public on October 30, 2025, Tinubu directed the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to immediately implement the new tariff under what the government described as a “market-responsive import tariff framework.”

The directive, signed by the President’s Private Secretary, Damilotun Aderemi, followed a proposal by the Executive Chairman of FIRS, Zacch Adedeji, recommending a 15 per cent duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel to better align import costs with local market conditions.

Adedeji, in his memo to the President, explained that the initiative forms part of broader energy reforms aimed at boosting domestic refining, ensuring price stability, and strengthening the naira-based oil economy in line with the administration’s Renewed Hope Agenda for energy security and fiscal sustainability.

“The main goal of this initiative is to promote crude oil transactions in local currency, enhance local refining capacity, and guarantee a stable and affordable fuel supply across the country,” Adedeji stated.

He warned that the existing imbalance between locally refined products and import parity pricing had led to market instability.

“While domestic refining of petrol is gradually increasing and diesel sufficiency has been achieved, price volatility remains due to the misalignment between local refiners and marketers,” he noted.

Adedeji explained that import parity pricing — which determines retail fuel prices — often falls below the cost recovery threshold for local producers, especially during fluctuations in foreign exchange and shipping costs, thereby undermining new refineries.

He added that the government now has a dual responsibility “to protect consumers and local producers from unfair pricing and collusion, while ensuring a fair environment for refineries to recover costs and attract investments.”

According to him, the new tariff framework will discourage duty-free fuel imports that undermine domestic production and foster a competitive and sustainable downstream market.

Projections in the letter suggest that the 15 per cent import duty could raise the landing cost of petrol by about ₦99.72 per litre.

“At current CIF rates, this represents an increase of approximately ₦99.72 per litre, pushing the imported cost closer to local cost recovery levels without distorting supply or raising consumer prices excessively. Even with this adjustment, estimated pump prices in Lagos are expected to remain around ₦964.72 per litre ($0.62), still below regional averages such as Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37),” the document stated.

The new policy comes as Nigeria intensifies efforts to reduce dependence on imported petroleum products and strengthen domestic refining.

The 650,000 barrels-per-day 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 refining.

Despite these improvements, petrol imports still account for about 67 per cent of national consumption.