New Policy: Tinubu Approves 15% Import Duty on Petrol and Diesel

President Bola Tinubu has formally approved a 15% import duty on petrol and diesel imports. This new ad-valorem tariff is intended to safeguard Nigeria’s growing local refineries.

Furthermore, the measure aims to stabilize the domestic downstream petroleum market. However, this new duty is widely expected to cause fuel pump prices to increase nationwide.

The directive establishes a “market-responsive import tariff framework.” The President’s instruction for immediate implementation was communicated in an official letter. The document was dated October 21, 2025, and made public nine days later.

Why the Government Introduced the 15% Import Duty

The tariff followed a detailed proposal. This proposal came from the Executive Chairman of the Federal Inland Revenue Service (FIRS).

The FIRS recommended applying the 15% duty on the Cost, Insurance, and Freight (CIF) value of imported fuels. This step aligns import costs with current domestic market realities.

The FIRS Chairman explained the policy’s focus. It directly supports the administration’s core goals of fiscal stability and energy security. Key objectives include:

• Operating crude transactions using the local currency.
• Strengthening the country’s domestic refining capacity.
• Ensuring a stable supply of products nationwide.

Tariff Seeks to Correct Market Imbalances

The FIRS boss highlighted an issue causing persistent price instability. This problem stems from a misalignment. Locally refined products often clash with the import parity pricing benchmark.

He noted that domestic producers are struggling to compete effectively. Consequently, even though local diesel production is now sufficient, the pricing often falls short of cost recovery for refiners. Foreign exchange and freight volatility intensify this pressure.

The new tariff is specifically designed to address this problem:

• It protects domestic producers from being undercut by cheaper, duty-free imports.
• It fosters a competitive environment where refiners can recover costs.
• Therefore, the framework protects consumers and local producers from unfair pricing.

Projected Fuel Price Impact and Regional Comparison

Official government projections show the 15% import duty will significantly raise fuel landing costs. The tariff could increase the landing cost of petrol by an estimated $\text{N99.72}$ per litre.

However, the government argues consumer prices will remain competitive. Even with the new duty, projected Lagos pump prices (aroundN964.72) are substantially below those in nearby West African nations. For example, prices are much lower than in Senegal (US\$1.76) Cote d’Ivoire (US\$1.52), and Ghana (US\$1.37).

Boosting Local Refining Capacity is Key

This policy supports Nigeria’s aggressive plan to reduce reliance on fuel imports. Currently, petrol imports satisfy up to $67\%$ of the country’s demand.

Local production is growing stronger:

• The 650,000 barrels-per-day Dangote Refinery now produces aviation fuel and diesel.
• Modular refineries in Edo, Rivers, and Imo states are also refining small-scale petrol.

The new import duty framework aims to provide essential protection for these emerging domestic producers. This aids the nation’s journey toward energy self-sufficiency.

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