President Bola Tinubu has approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel imports into Nigeria.

The new tariff, according to the Presidency, is designed to protect local refineries, stabilise the downstream market and align with the administration’s broader energy reform agenda. However, it is also expected to raise pump prices across the country.

In a letter dated October 21, 2025, and made public on Wednesday, October 30, Tinubu directed the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to commence immediate implementation of the tariff under what the government described as a “market-responsive import tariff framework.”

The directive, signed by the President’s Private Secretary, Damilotun Aderemi, followed a proposal from the Executive Chairman of FIRS, Zacch Adedeji, who recommended a 15 per cent duty on the Cost, Insurance and Freight (CIF) value of imported petrol and diesel.

Adedeji, in his memo to the President, said the measure formed part of ongoing fiscal and energy reforms aimed at boosting local refining, ensuring price stability, and strengthening the naira-based oil economy under the Renewed Hope Agenda.

“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.

He warned that the current disparity between locally refined products and import parity pricing had created instability in the domestic market.

“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 noted.

Adedeji explained that import parity pricing, the benchmark used in determining pump prices, often falls below cost-recovery levels for local producers, especially during foreign exchange and freight fluctuations, thereby putting pressure on emerging domestic refineries.

According to him, government’s role was now “twofold: to protect both consumers and domestic producers from unfair pricing practices and collusion, while ensuring a level playing field that allows refiners to recover costs and attract investment.”

He added that the new tariff regime would discourage duty-free imports from undercutting local producers and foster a more competitive downstream environment.

Projections contained in the FIRS proposal indicate that the 15 per cent import duty could raise the landing cost of petrol by about ₦99.72 per litre.

“At current CIF levels, this represents an increment of approximately ₦99.72 per litre, nudging imported landed costs toward local cost-recovery without choking supply or inflating consumer prices beyond sustainable thresholds,” the document stated.

“Even with this adjustment, estimated Lagos pump prices would remain around ₦964.72 per litre ($0.62), still significantly below regional averages such as Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37 per litre).”

The policy comes amid intensified efforts by the Tinubu administration to reduce Nigeria’s dependence on imported petroleum products and boost domestic refining.

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

Despite these developments, however, petrol imports still account for about 67 per cent of Nigeria’s total demand.