The federal government has announced a major shift in energy policy as President Bola Tinubu approved a 15 percent ad valorem import duty on both Premium Motor Spirit (petrol) and Automotive Gas Oil (diesel). The decision, formalized in a letter dated October 21, 2025, and addressed to the Federal Inland Revenue Service and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, marks a renewed drive to protect and strengthen Nigeria’s refining industry while reducing dependence on imported fuel.
The new tariff will apply to the Cost, Insurance and Freight value of imported fuel, meaning every litre brought into Nigeria will now carry an added cost. Government estimates suggest the duty could raise the landing cost of petrol by about 99.72 naira per litre. With pump prices already around 900 naira per litre, experts warn the increase may push retail prices past 1,000 naira in many areas.
Officials describe the tariff as a strategic move to protect domestic refiners, including the Dangote Refinery and smaller modular plants, which face cost disadvantages when competing with cheaper imported fuel. The government also aims to strengthen Nigeria’s energy security by reducing reliance on imports and to attract more investment into local refining capacity.
FIRS Chairman Zacch Adedeji explained that the tariff was not primarily about revenue collection but about aligning import costs with domestic realities, encouraging self-sufficiency, and ensuring fair competition for Nigerian refiners.
With importers now paying higher duties, the added cost is expected to be passed on to motorists and consumers. This will likely lead to higher fuel prices, increased transport costs, and a ripple effect across goods and services. Many households and businesses, already under pressure from inflation, may face further hardship. However, the government argues that once local refineries ramp up production, fuel supply could stabilize, leading to lower prices and reduced exposure to global oil market shocks.
The government has granted a 30-day transition window to allow importers to adjust shipments already in transit. After that period, the tariff will come into full effect. The Nigerian Midstream and Downstream Petroleum Regulatory Authority will issue detailed guidelines on how the new duty structure will be applied.
Fuel stations are expected to begin adjusting pump prices in the coming weeks, depending on supply and import costs. The success of this policy will depend heavily on how quickly local refiners can increase production and on the government’s ability to manage inflationary pressures. If domestic output remains low, consumers could continue to face high prices despite the new policy.
The approval of the 15 percent import duty marks a critical moment in Nigeria’s energy reforms. It signals a shift from reliance on imported fuel toward building a self-sustaining refining industry. The coming months will test whether this policy can balance industrial growth with the realities of rising living costs for ordinary Nigerians.
