Nigeria’s Fuel Prices Set to Surpass ₦1,000 Per Litre as Tinubu Approves 15% Import Tariff
Nigerians are bracing for what could be the most significant fuel price surge in recent history as President Bola Tinubu’s administration greenlights a controversial 15% import tariff on petroleum products. Industry experts and petroleum marketers warn that this policy could push pump prices beyond the psychological threshold of ₦1,000 per litre, placing additional strain on households and businesses already grappling with economic challenges.
The Policy Framework and Its Immediate Implications
The newly approved 15% ad valorem import duty on petrol and diesel imports represents a strategic shift in Nigeria’s energy policy. According to documents obtained by our investigation, the tariff will take effect following a 30-day transition period expected to conclude on November 21, 2025. But what does this mean for the average Nigerian consumer, and how will it impact the already volatile fuel market?
Multiple depot operators, speaking on condition of anonymity due to the sensitivity of the matter, expressed grave concerns about the policy’s timing and potential consequences. “As it stands, the price of fuel may go above ₦1,000 per litre,” one operator revealed in a telephone interview. “I don’t understand why the government would add more to people’s suffering at a time like this.”
Protecting Local Refiners at What Cost?
The government’s primary justification for the tariff centers on protecting domestic refining capacity. With the Dangote Refinery now operational and other local refiners gradually coming online, the administration aims to create a level playing field that discourages cheaper imports from undermining domestic investments. But is this protectionist approach premature given that local refineries still cannot meet national demand?
Energy analyst Olatide Jeremiah provided sobering context: “The introduction of a 15% tariff will add a mark-up of approximately ₦100 per litre to the landing cost of petrol and diesel. While this move will drive demand toward local refineries and increase government revenue, it could also trigger price hikes and short-term energy insecurity.”
Projections contained in the presidential approval letter indicate the tariff could increase petrol landing costs by an estimated ₦99.72 per litre, based on average daily consumption of 19.26 million litres as of September 2025. This translates to an additional ₦1.92 billion in daily import costs—money that will ultimately flow from consumers’ pockets to government coffers.
Industry Stakeholders Voice Mixed Reactions
The National Vice-President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, acknowledged the policy’s dual-edged nature. “The 15% tariff on imported fuel has its own implications,” Fashola stated. “Maybe the price will go up, and equally, it will discourage importers from bringing in fuel if it becomes too costly.”
Fashola highlighted the delicate balance the government must maintain: “I see that the government is trying to protect local refiners, but it will have its own implications because people will see it as a way of monopolising the industry for certain people. At the same time, the government aims to protect the local refiners.”
Perhaps the most significant concern raised by industry insiders involves the potential for supply disruptions. “If the local refiners fail to meet demand, it will have its own implications,” Fashola warned. “It may lead to scarcity, and people will not have an alternative.”
The Dangote Factor and Market Concentration
Another depot operator, who requested anonymity, pointed to the growing influence of the Dangote Refinery in market dynamics: “Unfortunately, some of the importers are working in alignment with Dangote, which is why the last price increase was general; all players raised their prices at once.”
This observation raises important questions about market concentration and competition. With the Dangote Refinery positioned as the dominant local producer, could the new tariff inadvertently strengthen its market position at the expense of smaller players and ultimately, consumers?
Government’s Rationale and Legal Foundation
The presidential directive, signed by Private Secretary Damilotun Aderemi and dated October 21, 2025, frames the tariff as part of a “market-responsive import tariff framework” proposed by FIRS Executive Chairman Zacch Adedeji. The policy finds its legal footing in Sections 21 and 22 of the Petroleum Industry Act, which empower regulators to impose measures promoting national energy security.
Adedeji’s memo to the President argued that the current misalignment between locally refined products and import parity pricing has created instability in the market. “While domestic refining of PMS has begun to increase and diesel self-sufficiency has been achieved, price instability persists,” the document stated. “Import parity remains the benchmark for pricing but often sits below the cost-recovery point of local producers.”
Regional Price Comparisons and Consumer Impact
Interestingly, government projections suggest that even with the tariff, Nigerian pump prices would remain below regional averages. The approval letter estimates Lagos pump prices around ₦964.72 per litre ($0.62), comparing favorably to Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37). However, these comparisons provide little comfort to Nigerian consumers facing stagnant wages and rising living costs.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), described the tariff as a “win-win situation” but emphasized the need for vigilance. “Our expectation is that at some point, it might be reviewed,” he stated. “We are looking for product availability and affordability. We must always keep an eagle eye on these two things.”
Implementation Timeline and Regulatory Response
The NMDPRA spokesperson, George Ene-Ita, has assured full implementation of the tariff once formal directives are received. “We are the sector regulator, and once the policy comes into force, we will definitely play our regulatory role and midwife the process on behalf of the government,” Ene-Ita confirmed.
He emphasized that the downstream market remains fully deregulated, meaning market forces and competition would ultimately determine pump prices. “Since it is a presidential directive, the template is already there to follow through,” the spokesperson added. “Prices may rise, stay the same, or even drop depending on competition and market realities.”
The Road Ahead: Balancing Protectionism and Pragmatism
As Nigeria navigates this critical juncture in its energy policy, several questions remain unanswered. Can local refiners ramp up production sufficiently to meet national demand? Will the government’s protectionist measures achieve their intended effect without causing undue hardship to consumers? And how will market dynamics evolve in this new regulatory environment?
The presidential directive includes provisions for periodic review, with potential scaling down or elimination of the tariff as domestic refining capacity expands. This sunset clause provides some reassurance that the measure is temporary, though its duration remains uncertain.
What remains clear is that Nigeria’s journey toward energy self-sufficiency continues to present complex trade-offs. While protecting local refineries is crucial for long-term energy security, the short-term pain for consumers could be substantial. As one industry insider poignantly asked: “How much more can the average Nigerian bear?” The answer to this question may determine the ultimate success or failure of this controversial policy.
Full credit to the original publisher: TheCitizen – https://thecitizenng.com/petrol-soars-above-n1000-ltr-as-tinubu-okays-15-import-tariff/