15% tariff: Nigerians to pay N1tn extra for petrol yearly
Nigerians are expected to incur an additional cost of approximately N1 trillion (N973.6 billion) each year on petrol imports due to the Federal Government’s proposed implementation of a 15 percent import tariff on Premium Motor Spirit (petrol), as revealed by a price analysis conducted.
As per a report on petrol import trends acquired from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, which was reviewed on Tuesday, Nigeria imported an average of 26.75 million litres of petrol daily from January to September 2025.
With a projected import tariff rate of N99.72 per litre, as indicated in the presidential approval letter for the 15% tariff, the tariff cost for the 26.75 million litres would amount to approximately N2.67 billion each day.
When calculated over an entire year, this results in an astonishing N973.64 billion, a burden that Nigerians will ultimately face through increased pump prices once the policy is enacted. While this figure represents additional revenue for government finances, it will lead to a direct rise in fuel costs for households, transporters, and businesses across the country.
President Bola Tinubu’s endorsement of a 15 percent import policy on PMS and diesel has raised significant concerns within the oil and gas industry, with operators cautioning that it could elevate petrol prices, exacerbate inflation, and heighten import expenses, despite the government’s assertion that the policy is intended to enhance local refining and generate revenue.
The President’s endorsement was communicated in a letter signed by his Private Secretary, Damilotun Aderemi, following a proposal put forth by the Executive Chairman of the Federal Inland Revenue Service, Zacch Adedeji.
The proposal aimed to impose a 15 percent duty on the cost, insurance, and freight value of imported petrol and diesel to better align import expenses with domestic market conditions.
Adedeji, in his memorandum to the President, articulated that the initiative is part of ongoing fiscal and energy reforms aimed at bolstering the naira-based oil economy, ensuring price stability, and expediting the nation’s shift towards local refining capacity in accordance with the administration’s Renewed Hope Agenda for energy security and economic sustainability.
He further recommended that the government promote transparency by establishing a specific Federal Government revenue account overseen by the Nigeria Revenue Service, with verification and clearance managed by the NMDPRA.
"At the current CIF (Cost, Insurance, and Freight) rates, this translates to an increase of approximately N99.72 per litre, which nudges the landed costs of imports closer to local cost recovery without constraining supply or inflating consumer prices beyond sustainable limits.
"The primary aim of this initiative is to facilitate crude transactions in local currency, enhance local refining capacity, and guarantee a stable, affordable supply of petroleum products throughout Nigeria," Adedeji remarked.
The FIRS leader emphasized that the policy is not intended to generate revenue but rather to correct existing disparities, aligning import costs with local production realities and preventing duty-free imports from undermining domestic refineries that are just beginning to recover.
He contended that the new tariff structure would deter duty-free fuel imports from undermining domestic producers and promote a fair and competitive downstream market. He also cautioned that the current misalignment between locally refined products and import parity pricing has led to market instability.
"Although domestic refining of petrol has started to rise and diesel sufficiency has been achieved, price instability continues, partly due to the misalignment between local refiners and marketers," he noted. The new policy will come into effect following a 30-day transition period, which is anticipated to conclude on November 21, 2025.
Dissenting Opinions
In light of recent developments, dissenting opinions from industry experts and petroleum marketers have become increasingly pronounced, with numerous individuals questioning the timing and potential ramifications of the 15 percent import tariff.
On Tuesday, the Independent Petroleum Marketers Association of Nigeria voiced concerns regarding the newly sanctioned 15 percent import tariff on petrol and diesel, characterizing it as misaligned with the principles of market deregulation.
In an interview with our correspondent, Chinedu Ukadike, the National Publicity Secretary of IPMAN, stated that independent marketers do not oppose President Tinubu’s directive; however, they criticize the design of the policy, which he contends undermines the foundations of a free and competitive market.
"Independent marketers have no issue with the President’s directive, but the concern lies in the fact that due to policymakers, the policy does not adhere to the spirit of deregulation," Ukadike remarked.
"When you liberalize the market and subsequently begin to favor a specific segment of the industry over others, it indicates that you are placing the cart before the horse. The liberalization was intended to facilitate a free market governed by a willing buyer, willing seller framework. The policy should not obstruct those wishing to import from competing with the local industry."
He called upon the Federal Government to prioritize incentivizing local refineries instead of imposing tariffs on fuel imports, emphasizing that such actions could distort competition and deter private sector involvement.
“The government should rather encourage local refineries by giving them crude and reducing taxes for local refiners so that they can lower their prices. The important thing is the price war between refineries and importers. One thing I know is that there is no way domestic products will be cheaper, and marketers will still decide to import. There is no need to put a tariff on importation because they would know importing is not lucrative and would source products locally. So we must do everything to boost our market and solve issues. The government has to allow domestic refiners and importers to compete without government-induced favouritism,” he advised.
According to Ukadike, the inherent dynamics of market forces would render imports less appealing once local production becomes more cost-effective. "There is no necessity to impose a tariff on imports because as soon as domestic products are more affordable, marketers will instinctively source locally. The government should permit domestic refiners and importers to compete freely without any government-imposed restrictions," he elaborated.
He cautioned that any artificial escalation in fuel prices would exacerbate inflation, particularly in anticipation of the Yuletide season when the demand for petrol generally increases.
"The most crucial aspect of market forces is a reduction in prices. Any increase in pricing will result in inflation, especially now that Christmas is nearing and more individuals will be traveling. There must be no product shortages, and the government must guarantee that local refining, distribution, and collaboration with stakeholders are fully operational," Ukadike further stated.
The Chief Executive Officer of PetroleumPrice.ng, Jeremiah Olatide, characterized the recently approved 15 percent import tariff on petrol and diesel as a double-edged sword, one that could enhance government revenue but also intensify the economic difficulties faced by Nigerians.
In response to this development, the oil market analyst indicated that the tariff would have a significant effect on fuel prices and inflation rates, particularly as Nigerians continue to adapt to the repercussions of the removal of the fuel subsidy.
“Yes, that calculation is accurate,” he told The PUNCH in response to estimates showing Nigerians may pay nearly N1tn extra annually on petrol imports due to the new tariff. Although the figure can go higher because we are still in the current year, depending on landing costs, too.”
According to him, while the policy represents a strategic move to shore up revenue amid fiscal constraints, it comes at a difficult time for most Nigerians. “For me, it is a good thing that revenue will increase. It’s a smart way to generate income for the country, considering our current expenses and the need for multiple revenue streams.
“But the timing is not really good. Nigerians are still struggling to buy petrol at N800 or N900 per litre. Subsidy removal happened two years ago and has already taken a toll on households. Adding extra expenses through a tariff will hit them hard and definitely push up inflation,” he explained.
He also warned that a combination of the 15 per cent import duty and a proposed five per cent surcharge could further burden consumers and distort market stability.
He said, “The timing is not really good. Two years ago, the subsidy was removed. The effect has not reduced, and we are already facing another issue. The government also plans to begin a five per cent surcharge soon. All of these just make them an additional burden on Nigerians. The government has to be strategic in the rollout.
“I know they are trying to protect local refineries, but there are better policies and ways to support them without having to put more burden on Nigerians. The government could have prioritised a naira-for-crude deal instead.”
The energy expert further noted
