From Victor Osula Abuja
The Federal Government has approved a 15 per cent ad-valorem duty on imported petrol and diesel as part of new policy measures aimed at protecting emerging local refineries, including the 650,000 barrels-per-day Dangote Refinery, and stabilising Nigeria’s downstream petroleum market.
President Bola Tinubu authorised the tariff framework in a directive dated October 21, 2025, instructing the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to begin immediate enforcement.
The presidential directive, made public on Wednesday, forms part of a “market-responsive import tariff framework” designed to align domestic pricing with realistic cost structures and encourage investment in the country’s refining sector.
Signed by the President’s Private Secretary, Damilotun Aderemi, the directive endorsed recommendations from the FIRS Chairman, Zacch Adedeji, proposing a 15 per cent duty on the cost, insurance and freight (CIF) value of imported petrol and diesel to reduce fuel import dominance.
Adedeji described the new duty regime as a strategic pillar of the administration’s Renewed Hope Agenda aimed at promoting energy security, currency stability, and refinery expansion.
“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,” Adedeji said in his memo to the President.
He explained that despite growing domestic refining capacity, market instability has persisted due to pricing disparities between imported fuel and locally produced petroleum products.
“While domestic refining of petrol has begun to increase and diesel sufficiency has been achieved, price instability persists, partly due to the misalignment between local refiners and marketers,” he stated.
Adedeji noted that international pricing structures—driven by forex fluctuations and freight costs—often put imported fuel below the cost-recovery threshold for local producers.
“Import parity pricing often falls below cost-recovery levels for domestic refiners,” he added, stressing the need for government intervention to balance market forces with protection for strategic energy infrastructure.
According to him, the new tariff is necessary “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.”
Projections in the presidential approval indicate that the tariff could raise the landing cost of petrol by about N99.72 per litre.
However, the document clarified that pump prices would remain competitive.
“Estimated Lagos pump prices would remain around N964.72 per litre ($0.62), still significantly below regional averages such as Senegal ($1.76), Côte d’Ivoire ($1.52) and Ghana ($1.37),” the directive stated.
Government officials say the measure will help prevent duty-free imports from undermining domestic refineries, stimulate investment, and promote long-term price stability.
Nigeria has recently recorded progress in domestic refining capacity. The Dangote Refinery has begun producing diesel and aviation fuel, while modular refineries in Edo, Rivers, and Imo States have commenced limited petrol output.
Despite these gains, imported petrol still accounts for about 67 per cent of national consumption—highlighting the need for decisive policies to strengthen local production and ease pressure on foreign exchange reserves.
