President Bola Ahmed Tinubu has approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel, a policy aimed at protecting Nigeria’s emerging local refineries and stabilising the downstream petroleum market.

The directive, contained in a letter dated October 21, 2025, and made public on October 30, was addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). It ordered the immediate implementation of the new tariff as part of a “market-responsive import tariff framework.”

The letter, signed by the President’s Private Secretary, Damilotun Aderemi, conveyed Tinubu’s approval following a proposal by FIRS Executive Chairman, Zacch Adedeji, who argued that the measure would align import costs with domestic production realities.

According to Adedeji, the new tariff forms part of ongoing fiscal and energy reforms designed to boost local refining capacity, stabilise prices, and strengthen Nigeria’s naira-based oil economy, in line with the administration’s Renewed Hope Agenda for energy security and economic sustainability.

“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 stated.

The FIRS chairman further warned that price instability in the downstream market was being fuelled by the misalignment between local refining costs and import parity pricing, which often undercuts domestic producers.

“While domestic refining of petrol has begun to increase and diesel sufficiency has been achieved, price instability persists, partly due to this misalignment,” he wrote.

Adedeji explained that the 15 per cent duty on the cost, insurance, and freight (CIF) value of imported fuels would discourage duty-free imports from undercutting domestic producers, while ensuring fair competition and cost recovery for refiners.

Projections contained in the presidential letter indicate that the new tariff could raise the landing cost of petrol by an estimated ₦99.72 per litre, bringing average Lagos pump prices to about ₦964.72 ($0.62)—still below regional averages such as Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37) per litre.

The move comes as Nigeria intensifies efforts to reduce dependence on imported petroleum products and expand domestic refining capacity.

The 650,000-barrel-per-day Dangote Refinery has already commenced diesel and aviation fuel production, while modular refineries in Edo, Rivers, and Imo States have begun small-scale petrol refining.

Despite these advances, imported petrol still accounts for about 67 per cent of national demand, underscoring the government’s push to balance protection for local producers with affordability for consumers.

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The adjustment, which took effect earlier this week, reflects shifting dynamics in the international oil market, where prices are now trending downward due to increased supply and weakening demand projections.

Two outlets operated by A.Y.M Shafa along Airport Road led the drop, followed closely by Matrix Energy, which made similar adjustments. Other stations followed suit, with NIPCO cutting prices to N925 and Conoil selling at N935 per litre.

Industry observers link the decline to falling crude oil prices, which dipped below Nigeria’s fiscal benchmark of $75 per barrel on Monday. While Nigeria’s Bonny Light still traded at $78.62, other major crude grades like Qua Iboe and Brass River slipped to the mid-$60s—well below expectations for sustaining national revenue.

The implications are mixed. On one hand, lower crude prices could provide short-term relief for businesses and households grappling with high energy costs. On the other, analysts warn it could spell trouble for government finances.

“It’s a double-edged sword,” explained energy analyst Olatide Jeremiah, CEO of Petroleumprice. “Yes, inflation might ease, and petrol could even dip to N800 if the trend continues. But the budget risks unraveling if crude stays this low. We’re looking at a tough fiscal year if prices remain in the $60 range.”

He emphasized the potential domino effect on everything from public services to capital projects, given Nigeria’s heavy reliance on oil revenue.

Petroleum marketers have confirmed that pricing remains tightly tied to global crude benchmarks and currency exchange rates. Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria, reiterated that fuel prices in Nigeria fluctuate based on the international cost of crude and the strength of the naira.

He also noted a potential game-changer: the federal government’s move to supply crude to the Dangote Refinery in naira. “This could ease pricing pressures further,” Ukadike said. “Once it reflects at the loading depots, we expect lower prices to become more consistent at the retail end.”

Currently, the landing cost of imported petrol is down to N849.27 per litre—just shy of the N835 reportedly offered by Dangote’s facility. Industry sources say if this pricing stability holds, Nigerian consumers may finally begin to feel real relief from the weight of high fuel costs.

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