The Nigerian government’s approval of a 15 per cent import tax on petrol and diesel, primarily to protect local refineries, has, however, sparked significant concerns over higher fuel prices and increased economic hardship for citizens.
A memo dated October 10, 2025, signed by Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), addressed to President Bola Tinubu, had proposed what was described as a “measured import tariff on PMS and diesel.” It said the policy is targeted at aligning import costs with Nigerian market realities, boosting local refining capacity, and stabilising the downstream market.
Subsequently, a memo dated October 21, 2025, conveying the president’s approval, directed the FIRS and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to immediately begin implementation of the tariff.
“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 explained.
The presidential approval notes projected that the 15 per cent import duty could only raise the landing cost of petrol by about ₦99.72 per litre, adding that it “nudges imported landed costs toward local cost-recovery without choking supply or inflating consumer prices beyond sustainable thresholds.”
It estimated that with the adjustment, the pump prices in Lagos would remain in the range of ₦964.72 per litre ($0.62), which it said was still significantly below regional averages such as Senegal ($1.76 per litre), Cote d’Ivoire ($1.52 per litre), and Ghana ($1.37 per litre).
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Some stakeholders, like the Dangote refinery, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) and the Crude Oil Refinery Owners Association of Nigeria (CORAN), have commended the Federal Government for coming up with the policy, saying it is aimed at boosting domestic refining. PETROAN said it is a step toward achieving energy security and sustainable local refining.
However, there are concerns that the policy could affect the cost of imported petrol and diesel, putting more burden on the consumers.
Some energy experts warned that the policy could disrupt supply and price stability, stressing that since imports still account for a significant portion of national supply (estimated between 60 and 69 per cent), if local refineries cannot meet demand, it could backfire, leading to fuel shortages.
There are concerns that the increased duty could push out smaller independent marketers who cannot bear the higher costs, leaving the market to be dominated by a few large players and reducing competition.
READ ALSO: Dangote Refinery Backs 15% Fuel Import Tax, Push Against Substandard Products
Reacting to the development, a finance expert, Dr Nnaemeka Onyeka Obiaraeri, said while trying to protect local refineries, the government must not resort to actions that put more burden on the people.
Obiaraeri, who is the Managing Director/CEO of Taurus Capital & Advisory Limited, a Pan African Investment Banking Firm, stressed the need for government to address fundamental issues affecting domestic production, not imposing tax on petroleum products imports.
He said records show that Nigeria was producing about 2.8 million barrels of crude oil per day in 2010, but the resurgence of militancy in the Niger Delta crippled production and today the country is stil recovering, managing to produce about 1.7 million bpd.
“If we want to protect local industries, we must do it in such a way that protects Nigerians,” he stated in a video released via his YouTube channel.
He said the move to implement a 15 per cent tariff on petrol and diesel imports is “ill-advised.”
According to him, it is practically impossible for the cost of imported products to be at par with the ones produced locally. He said while data shows that the landing cost for Petrol in Nigeria is currently at ₦823 per litre, the Dangote Refinery, which is the largest single-train refinery in the world, is selling a litre at a gantry price of ₦877.
He raised questions about why the price of imported petroleum products seems lower (as indicated by the landing cost data) than what domestic refineries in Nigeria are selling.
Speaking on quality, Obiaraeri said the government should set up a laboratory at the NMPDRA to ensure that what is imported conforms with the standards approved by the downstream regulatory authority.
He emphasised that boosting local production can be achieved through efficient management to improve on quality and increase output to compete with other refineries abroad.
“There is no refinery in Nigeria, if we are very efficient and corrupt-free, that cannot compete with refineries anywhere in the whole world and produce it cheaper here,” he insisted.
He further stated that the government can protect domestic producers by subsidizing production. He called for concerted efforts towards ramping up crude oil production, attracting more investments in the industry and also privatizing the Nigeria National Petroleum Company Limited (NNPCL) to make it more efficient like Petrobras in Brazil, “so that the corruption and inefficiencies that have reduced production and even the cost of production are eliminated.”
The finance expert further mentioned that part of the measures to protect local refineries and boost domestic production could also include privatizing the three state-owned refineries in Port Harcourt, Warri, and Kaduna. He suggested that depot owners can take over the assets and rehabilitate them to increase the country’s refining capacity.
However, Energy expert and public affairs commentator, Mustapha Samaila Inagawa, backed the introduction of 15 per cent fuel import tariff, saying it is the best way of promoting local content and still preventing a potential energy security crisis.
While stating that the 650,000 bpd capacity Dangote Refinery still lacks the capacity to satisfy the Nigerian energy market because it is still operating at about 300,000 bpd due to operational inconsistencies and maintenance issues, Inagawa maintained that the refinery can take over the market without government direct involvement if it improves production capacity, coupled with its now increased logistics advantage for distribution.
READ ALSO: PETROAN Seeks Level Playing Field in Oil Market, Warns Against Monopoly
The Crude Oil Refinery Owners Association of Nigeria (CORAN), in a statement by its publicity secretary, Eche Idoko, emphasised that the policy can only achieve its intended effects if it is implemented alongside other supportive measures that increase domestic refining capacity.
“Without complementary policies—such as fair and stable pricing for domestic crude supply, guaranteed and timely crude allocation to local refineries, and the effective rollout of midstream and downstream intervention programmes—this tariff risks becoming counterproductive.
“The policy may increase the cost of imported products without a corresponding increase in local supply, thereby creating artificial scarcity and imposing additional hardship on consumers, much like the experience that followed the removal of fuel subsidy,” Idoko stated.
He said the 15 per cent tariff can only yield a positive outcome if the government adopts a “balanced implementation framework” by ensuring that domestic refiners have access to affordable crude, finance, infrastructure, and a predictable policy environment.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X
