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President Bola Tinubu’s proposed 15 per cent import duty on fuel and diesel has been greeted with commendations and criticisms. According to the government, the new tariff will protect local refineries and boost energy security. The Chairman of FIRS, Zack Adedeji, had requested the federal government to implement the new duty to ensure that imported petrol and diesel are not cheaper than what is produced locally.
Before implementation, the proposed tariff will allow importers of refined petrol and diesel a 30-day transition window to adjust cargoes already in transit to ensure a smooth rollout without market disruptions. The 15 percent import duty specifically applies to the cost, insurance, and freight (CIF) value. However, the new import tariff is not without controversy. The FIRS, its major promoter, has argued that the plan is not driven by revenue. It explains that the main objective of the new tariff is to ensure parity in pricing that has created instability in the market.
It is also meant to preserve operational affordability and crude oil transactions in local currency. In addition, it will strengthen local refining capacity and ensure stable and affordable supply of petroleum products across the country. Besides, the new import duty will deepen support for Made-in-Nigeria goods, which is in line with Nigeria First Agenda policy of the Tinubu administration. This agenda will protect national resources through sustainable industrial development, promote value addition, save Foreign exchange (FX), and enhance operational readiness of local refineries, reduce supply disruptions and stabilise energy for businesses. These objectives are laudable on paper. However, there are fears over its effective implementation and price monitoring mechanism that will check excessive profit-making. While it is government’s responsibility to protect consumers as well as domestic refineries from unfair pricing practices and collusion, creating a monopoly remains an issue. There is so far no assurance of a level playing field for all the players in the sector. The fear being expressed in some quarters that the plan is skewed to favour an individual or entity is a legitimate concern.
Currently, all the nation’s four refineries located in Port Harcourt, Warri and Kaduna are not working in spite of the billions of naira spent in Turn Around Maintenance (TAM). Although the Dangote Refinery, with installed capacity of 650,000 barrels per day, is more than the total installed capacity of the four government-owned refineries, other players in the downstream oil sector have continued to import fuel and diesel to complement the shortfall. Nigerians are worried that the 15 per cent import tariff will drive prices of petroleum products.
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This has far-reaching implications; especially at this time that majority of the people are grappling with economic hardship arising from the removal of petrol subsidy on May 29, 2023. Other economic reforms have worsened the cost of living across the country. According to economic analysts, more challenges are coming, as Nigerians may be forced to pay additional amount of N973.6billion annually on petrol imports when the 15 per cent import duty on fuel and diesel takes off. According to statistics, Nigeria imported an average of 26.75 million litres of fuel daily between January and September 2025. The government should not lose sight of the unpleasant consequences of the import tariff, as it will lead to increased prices, higher inflation and significant hardship for citizens and businesses, especially given our heavy reliance on imports.
This is even more so, as the tariff is projected to increase the landing cost of fuel and diesel, an extra cost that importers and marketers are likely to pass on to consumers, potentially pushing up pump prices of fuel above N1,000 per litre in many states. At a projected tariff rate of N99.72 per litre as stated in the presidential approved letter for the 15 percent import duty, the amount that will be spent as tariff for the 26.75 million daily fuel consumption will be N2.67billion daily. This will add up to a staggering N973.64billion. Nigerians will ultimately bear the higher pump price. This will translate to a direct increase in fuel expenses for households, transporters and other businesses nationwide.
We urge the federal government to be sensitive to the economic consequences of the planned implementation of the 15 per cent import duty on fuel and diesel, and perhaps drop the idea until the economy improves. But if the government insists on going ahead with the plan, the proceeds from the import tariff should be reinvested in energy infrastructure, refinery efficiency, and power support for industry, including credit for renewable energy transition. Government should introduce incentives to attract investment in modular and conventional refineries that will strengthen capacity and enhance energy security.
