President Bola Tinubu has approved a 15% ad-valorem import duty on Premium Motor Spirit (petrol) and Automotive Gas Oil (diesel). 

The tariff, charged on the CIF value at discharge, is designed to make imported fuel less able to undercut output from Nigerian plants and to push the market toward domestic refining.

A memo dated October 10, 2025 and signed by Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), presented the plan as a “measured import tariff” to reinforce energy security, safeguard local capacity, and stabilise downstream pricing. 

The President approved it on October 24, 2025, with implementation after a 30-day transition so importers can adjust cargoes already on the water. Collection will be handled by FIRS, with NMDPRA verification before Customs clears any shipment.

What changes in the market

Until now, import parity has often sat below the cost-recovery point for local producers, especially during swings in currency and freight. By adding 15% at the point of entry, the tariff narrows the price gap between imports and local supply. 

A government estimate suggests the duty adds roughly ₦99.72 per litre to imported fuel costs. Officials argue Lagos pump prices would still be competitive by regional standards and that the goal is not to raise revenue but to align costs with domestic realities.

1) Better price support and utilisation.

Plants like Dangote Refinery and modular facilities can run at higher, steadier utilisation if imports no longer undercut ex-refinery prices. Predictable offtake improves cash flow and lowers per-barrel operating costs.

2) Investment confidence.

A clearer price floor reduces the risk of stranded investments. With visibility on margins, refiners can commit capital to maintenance, reliability upgrades, and product-quality improvements (e.g., Euro-V compliance).

3) Jobs and supply-chain deepening.

Higher run-rates mean more demand for logistics, storage, engineering services, and local chemicals, supporting industrial jobs around refining hubs.

4) Lower FX exposure over time.

As more volume is refined in-country, Nigeria’s import FX bill for petrol and diesel should shrink, reducing pressure on foreign exchange and smoothing the downstream cycle.

5) Policy alignment with the PIA.

Sections 71–72 of the Petroleum Industry Act allow NMDPRA to impose public-service obligations for supply security and pricing fairness, and to recover related costs. The tariff sits within that framework, and the President has ordered periodic reviews and potential sunset measures as capacity expands.

Why not 25%?

The Crude Oil Refinery Owners Association of Nigeria (CORAN) had pushed for 25% to curb what it called “dumping” of artificially cheap imports. After consultations with Finance, FIRS, and NMDPRA, the rate was set at 15% to limit inflationary spillovers while still protecting domestic plants.