President Bola Tinubu has approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel, a move aimed at protecting local refineries and stabilising Nigeria’s downstream petroleum market.
The directive, contained in a letter dated October 21, 2025, and made public on Wednesday, was addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
According to the letter signed by his Private Secretary, Damilotun Aderemi, the President’s approval followed a proposal from the Executive Chairman of FIRS, Zacch Adedeji, recommending the new tariff framework as part of broader reforms in the oil sector.
Adedeji explained that the duty would be applied on the cost, insurance, and freight (CIF) value of imported petrol and diesel to ensure parity between import costs and domestic market realities.
He stated, “The core objective of this initiative is to operationalise crude transactions in local currency, strengthen local refining capacity, and ensure a stable and affordable supply of petroleum products across Nigeria.”
The FIRS Chairman further noted that the disparity between locally refined and imported fuel prices had created market distortions. “While domestic refining of petrol has begun to increase and diesel sufficiency has been achieved, price instability persists, partly due to misalignment between local refiners and marketers,” Adedeji added.
He emphasised that the government’s goal is “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 policy, according to official projections, could raise the landing cost of petrol by about ₦99.72 per litre. However, the government assured that the adjustment would still keep local pump prices below regional averages.
Based on current calculations, the estimated pump price in Lagos could stand around ₦964.72 per litre ($0.62), compared to higher prices in other West African countries such as Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37).
The decision aligns with Nigeria’s broader efforts to cut fuel import dependency and support domestic refining capacity. The Dangote Refinery has commenced diesel and aviation fuel production, while modular refineries in Edo, Rivers, and Imo States have started producing petrol on a smaller scale.
Despite these developments, petrol imports still account for roughly 67 per cent of national demand, underscoring the importance of the new tariff policy in strengthening local refineries and ensuring long-term energy security.