FG Criticizes 15% Fuel Import Duty, Warns of Rising Costs

Nigerian imports of gasoline and diesel will now be subject to a 15% ad valorem import charge, which President Bola Tinubu has approved.

In order to boost Nigeria’s local refineries, the program would now impose a value-based tax on all imported fuel, making it more costly. This program attempts to lessen the nation’s dependency on imported fuel, promote domestic production, and establish a more equitable downstream sector.

In a letter to the Federal Inland Revenue Service and the Nigerian Midstream and Downstream Petroleum Regulatory Authority dated October 21, 2025, which was made public on October 30, 2025, Tinubu ordered the tariff to be implemented immediately as part of what the government called a “market-responsive import tariff framework.”

The president’s support of a recommendation made by Zacch Adedeji, the Executive Chairman of the FIRS, was expressed in the letter, which was signed by his Private Secretary, Damilotun Aderemi.

In order to bring import costs into line with the realities of the domestic market, a 15% tariff on the cost, insurance, and freight value of imported gasoline and diesel was proposed.

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 energy security and fiscal sustainability.

“This initiative’s main goals are to increase local refining capacity, operationalize crude transactions in local currency, and guarantee a steady, reasonably priced supply of petroleum products throughout Nigeria,” Adedeji said.

Additionally, the head of FIRS cautioned that the market is now unstable due to the current mismatch between import parity pricing and locally refined products.

“Diesel sufficiency has been reached and domestic petrol refining has started to increase, but price instability persists, partly due to the misalignment between local refiners and marketers,” 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 freight and foreign exchange fluctuations, placing pressure on newly established domestic refineries.

The government’s role is now “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 the new tariff structure will promote a fair and competitive downstream environment and deter duty-free gasoline imports from undercutting domestic manufacturers.

The letter’s predictions indicate that the 15% import charge might raise the price of gasoline by an estimated N99.72 per litre.

“This reflects an increase of around 99.72 per litre at current CIF levels, which pushes imported landed costs near local cost-recovery without restricting supply or raising consumer prices above sustainable boundaries. The predicted Lagos pump costs would still be substantially 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, remaining 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 reliance on imported petroleum products.

While modular refineries in the states of Edo, Rivers, and Imo have begun small-scale petroleum refining, the 650,000 barrels-per-day Dangote Refinery in Lagos has begun producing diesel and aviation fuel.

Nevertheless, up to 67% of the country’s gasoline needs are still met by imports despite these improvements.