Tinubu Approves 15% Import Duty on Petrol, Diesel — Experts Warn of Rising Fuel Costs

In a major fiscal policy shift, President Bola Ahmed Tinubu has approved the introduction of a 15 percent ad-valorem import duty on Premium Motor Spirit (PMS), commonly known as petrol, and Automotive Gas Oil (AGO), known as diesel. The policy, according to government insiders, is part of a broader plan to strengthen Nigeria’s non-oil revenue base and bring import practices in line with international trade standards.

𝐂𝐁𝐍 𝐔𝐫𝐠𝐞𝐝 T𝐨 𝐈𝐧𝐭𝐫𝐨𝐝𝐮𝐜𝐞 𝐍𝟏𝟎,𝟎𝟎𝟎 A𝐧𝐝 𝐍𝟐𝟎,𝟎𝟎𝟎 𝐒𝐢𝐧𝐠𝐥𝐞 𝐍𝐨𝐭𝐞𝐬

The approval was communicated in a letter dated October 21, 2025, signed by Damilotun Aderemi, the Private Secretary to the President, and addressed to both the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The letter, seen by TheCable, formally conveyed the President’s authorization for the duty to be applied on the Cost, Insurance, and Freight (CIF) value of imported petroleum products.

According to the correspondence, the move follows a request from the FIRS urging the Presidency to approve the measure to “align import cost structures to domestic fiscal realities.” The agency argued that most imported goods in Nigeria are already subject to ad-valorem import duties, and exempting petrol and diesel — two of the most widely consumed commodities — deprives the government of significant potential revenue.

Policy Rationale and Fiscal Implications

Nigeria has long relied heavily on crude oil exports for revenue, but with global energy market fluctuations and declining foreign reserves, the Tinubu administration has sought alternative sources of income. Introducing a 15 percent import duty on refined fuel products is expected to generate billions of naira in additional annual revenue, which could be channelled toward infrastructure, education, and energy reforms.

An ad-valorem duty is calculated as a percentage of the value of goods — in this case, the CIF value that includes the product’s cost, shipping, and insurance. The implication is that importers will now pay more at the point of importation, which will inevitably trickle down to the final consumer.

Government officials have defended the move as necessary for fiscal stability. “Nigeria cannot continue to subsidize the cost of imported fuel indirectly by exempting it from standard import taxes,” a senior FIRS official told reporters. “This is about equity, fairness, and ensuring our revenue system reflects the realities of the market.”

Expected Impact on Fuel Prices

Industry experts, however, warn that the policy could trigger another sharp increase in pump prices across the country. Early estimates suggest that the new duty could raise the retail cost of petrol by about ₦99.72 per litre. With current pump prices hovering between ₦617 and ₦680 per litre depending on location, Nigerians could soon be paying over ₦750 per litre once the import duty takes full effect.

Diesel, which has already crossed ₦1,000 per litre in some parts of the country, may rise further — potentially worsening transportation and production costs. Analysts note that since diesel powers most logistics, manufacturing, and small business operations, the ripple effect could fuel inflation and increase the cost of living for millions of Nigerians.

A Lagos-based energy analyst, Dr. Samuel Adekunle, described the move as “a double-edged sword.” While he acknowledged the government’s need to boost revenue, he cautioned that the timing could exacerbate economic hardship. “The government may gain in revenue, but the people will feel the brunt in higher prices and reduced purchasing power,” Adekunle said.

Economic Context and Public Reactions

Since the removal of petrol subsidies in 2023, fuel prices have more than tripled, and the cost of living has surged dramatically. The addition of a 15 percent import duty comes at a time when Nigerians are already struggling with inflation rates above 30 percent, currency depreciation, and stagnant wages.

Public reactions have been swift and divided. Many Nigerians on social media expressed outrage, accusing the government of being insensitive to the plight of ordinary citizens. “Every new policy seems to push Nigerians deeper into poverty,” one user wrote on X (formerly Twitter). “They said subsidy removal would bring market efficiency, now they’re adding more taxes.”

However, some economists argue that the policy could have long-term benefits if properly managed. They point out that the new duty might encourage domestic refining by making imported products more expensive, thereby giving local refineries — such as the Dangote Refinery and Port Harcourt Refinery — a competitive edge.

“If local production ramps up, the import duty will make Nigerian-made fuel more attractive and affordable,” said energy policy expert Dr. Kemi Ogundipe. “The challenge is ensuring that local refineries can actually meet demand, otherwise, we’ll just be increasing hardship without any relief in sight.”

Implementation and Outlook

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the FIRS are expected to work together to determine the modalities for implementation. Sources indicate that the new duty may take effect before the end of the year, depending on consultations with industry stakeholders.

Oil marketers have expressed concern about the policy’s immediate impact, noting that it may disrupt supply chains and worsen existing distribution bottlenecks. They are, however, optimistic that clear guidelines and phased implementation could help mitigate price shocks.

In summary, while the 15 percent import duty on petrol and diesel is intended to expand government revenue and align Nigeria’s tax system with global practices, it arrives at a time when the economy is fragile and citizens are facing unprecedented cost-of-living pressures. The true test of the policy will depend on how effectively the government balances fiscal sustainability with social protection — and whether Nigerians can endure yet another wave of price increases in pursuit of long-term economic stability.

— Newsword Media, October 2025