Tinubu’s 15% Import Duty on Petrol, Diesel Sparks Inflation Fears, May Push Pump Price Above ₦1,000/Litre

By Henryrich Ojo

President Bola Tinubu has approved a 15 percent ad-valorem import duty on petrol (PMS) and diesel, a decision already stirring anxiety among consumers, transporters, and businesses.

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The approval, contained in a letter dated October 21, 2025, and conveyed by Damilotun Aderemi, the President’s private secretary, to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), followed a request by the FIRS to apply the new rate on the cost, insurance, and freight (CIF) value of imported fuel.

According to the letter, the new tariff regime will raise the landing cost of petrol and diesel, increasing pump prices by an estimated ₦99.72 per litre—a development that could push petrol above ₦1,000 per litre and diesel closer to ₦1,400, depending on market forces.

Rising Fuel Prices, Rising Costs

The implementation of the 15 percent import duty is expected to trigger another wave of inflation across the country. Transportation fares, logistics costs, and food prices are projected to rise sharply as fuel remains a core driver of Nigeria’s cost structure.

Economists warn that the move will worsen existing inflationary pressures, with headline inflation already hovering above 30 percent.

“Any increase in petrol or diesel cost immediately affects every aspect of the economy—from the cost of moving goods to factory production and even food supply,” said Dr. Kunle Adedeji, an energy economist. “We may be looking at a chain reaction that hits the poor the hardest.”

Tougher Times for Businesses and Households

For businesses, especially those relying heavily on diesel for power generation, this policy could mean higher operational expenses and possible layoffs.
Small and medium enterprises (SMEs), which form the backbone of Nigeria’s economy, may find it harder to sustain production or maintain staff levels.
Transport companies and commercial drivers are also likely to increase fares immediately once the new rates take effect.

Households already struggling with high food and energy prices could see another round of cost-of-living spikes, further deepening hardship for millions of Nigerians.

Government’s Push for Revenue and Reform

While the decision may appear harsh, it aligns with the Tinubu administration’s broader plan to increase non-oil revenue and reduce the country’s heavy reliance on borrowing.
The FIRS is expected to rake in additional billions of naira annually from the new import duty, bolstering government finances amid fiscal challenges.

A senior official in the Ministry of Finance who spoke on condition of anonymity said the import duty is part of “ongoing efforts to bring Nigeria’s tax and trade policies in line with global best practices and to fund critical infrastructure.”

However, the government faces a delicate balance: generating revenue without worsening the economic pain of its citizens.

Boost for Local Refining—If It Works

Analysts believe the import duty could encourage local refining, as imported fuel becomes more expensive.
With the Dangote Refinery and several modular refineries expected to begin large-scale operations soon, the policy might make domestic fuel production more competitive.

“If local refineries come on stream fully, this could be a smart, long-term move,” noted energy analyst Gloria Nwosu. “But if they delay, Nigerians will suffer the consequences without seeing the benefits anytime soon.”

Until local refineries achieve full capacity, however, Nigeria remains dependent on fuel imports—leaving consumers exposed to global oil price fluctuations and policy-induced costs.

Public Backlash and Labour Resistance Loom

The new import duty is already drawing criticism from labour unions and civil society groups, who argue that the government is “taxing suffering citizens.”
The Nigeria Labour Congress (NLC) is reportedly reviewing the policy and may issue a response in the coming days.

Protests or industrial actions could follow if pump prices rise significantly, adding a political dimension to an already volatile economic environment.

What Lies Ahead

While the policy is expected to boost government revenue and encourage local refining, the short-term consequences are likely to be painful.
Consumers should brace for higher fuel prices, increased transport fares, and steeper food costs in the coming weeks.

Unless the Tinubu administration moves quickly to cushion the effects—perhaps through social intervention programs, transport subsidies, or faster refinery activation—the 15% import duty could deepen hardship and ignite fresh public anger.

As one analyst summed it up:

“This is a bold fiscal step—but it’s also a dangerous gamble. It will test whether Nigerians can endure more short-term pain for a promise of long-term gain.”

How the New Duty Affects You

In summary: Tinubu’s 15% fuel import duty is a bold move aimed at boosting revenue and promoting local refining—but it comes with steep economic and social costs that could test Nigeria’s resilience in the months ahead.

— By Newsworld