A 15% ad-valorem import tax on petrol and diesel imports into Nigeria has been approved by President Bola Tinubu.
In order to promote Nigeria’s local refineries, the plan means that all imported fuel will now be subject to a value-based tax. This program seeks to lessen the nation’s dependency on imported fuel, promote domestic production, and establish a more equitable downstream sector.
Tinubu instructed the Federal Inland Revenue Service and the Nigerian Midstream and Downstream Petroleum Regulatory Authority to immediately implement the tariff as part of what the government referred to as a “market-responsive import tariff framework” in a letter dated October 21, 2025, which was made public on October 30, 2025.
The letter, which was signed by his private secretary Damilotun Aderemi, expressed the president’s acceptance of a suggestion made by Zacch Adedeji, the Executive Chairman of the FIRS.
In order to bring import costs into line with domestic market realities, the proposal called for the implementation of a 15% tariff on the cost, insurance, and freight value of imported gasoline and diesel.
In his message to the president, Adedeji clarified that the action was a component of ongoing reforms to support local refining, guarantee price stability, and bolster the naira-based oil economy in accordance with the administration’s Renewed Hope Agenda for fiscal sustainability and energy security.
The initiative’s main goals are to “operationalize crude transactions in local currency, strengthen local refining capacity, and ensure a stable, affordable supply of petroleum products across Nigeria,” Adedeji said.
Additionally, the head of FIRS cautioned that market instability has resulted from the current mismatch between locally refined products and import parity price.
“Price instability persists, partly due to the misalignment between local refiners and marketers, even though domestic petrol refining has started to increase and diesel sufficiency has been achieved,” he said.
He pointed out that import parity pricing, which serves as the standard for setting pump prices, frequently falls short of local manufacturers’ cost recovery levels, especially during fluctuations in freight and foreign currencies, placing pressure on newly established domestic refineries.
The government now has “twofold, to protect consumers and domestic producers from unfair pricing practices and collusion, while ensuring a level playing field for refiners to recover costs and attract investments,” Adedeji continued.
He maintained that a fair and competitive downstream environment would be fostered by the new tariff system, which would deter duty-free gasoline imports from undercutting domestic producers.
The 15% import tariff could raise the landing cost of gasoline by an estimated N99.72 per litre, according to estimations in the letter.
“This represents an increase of roughly 99.72 per litre at current CIF levels, which pushes imported landed costs toward local cost-recovery without choking supply or raising consumer prices above sustainable thresholds.” The predicted Lagos pump costs would still be much lower than regional averages like Senegal ($1.76 per litre), Cote d’Ivoire ($1.52 per litre), and Ghana ($1.37 per litre) even after this modification, staying in the range of N964.72 per litre ($0.62).
The strategy is implemented as Nigeria steps up its attempts to increase domestic refining and lessen its reliance on imported petroleum products.
While modular refineries in the states of Edo, Rivers, and Imo have begun small-scale petrol refining, the 650,000 barrels-per-day Dangote Refinery in Lagos has begun producing diesel and aviation fuel.
But even with these improvements, up to 67% of the country’s gasoline needs are still met by imports.
