President Bola Tinubu has approved the implementation of a 15% ad-valorem import duty on premium motor spirit (PMS), popularly known as petrol, and automotive gas oil (AGO), also known as diesel. The move aims to align import costs with prevailing domestic market conditions but is expected to raise fuel pump prices across the country.
Presidential Approval and Implementation
The approval was conveyed in a letter dated October 21, 2025, issued 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).
According to the letter, the FIRS had requested the President’s authorization to apply a 15% import duty based on the Cost, Insurance, and Freight (CIF) value of imported petroleum products. The measure, according to the agency, is intended to ensure fair pricing, reduce fiscal leakages, and promote competitiveness in the downstream sector.
With this directive, analysts estimate that the new duty could push petrol prices higher by approximately ₦99.72 per litre, depending on global crude prices and exchange rate fluctuations.
NNPCL to Review Refinery Operations
Following the announcement, the Nigerian National Petroleum Company Limited (NNPCL) confirmed that it has initiated a comprehensive review of the country’s three state-owned refineries as part of efforts to reduce reliance on imports.
In a post on X (formerly Twitter), Bayo Ojulari, the Group Chief Executive Officer of NNPCL, said the company is exploring multiple strategies to restore refinery operations. These include partnerships with technical equity investors to either upgrade or repurpose the facilities.
“The NNPCL remains optimistic that the refineries will operate efficiently despite current setbacks,” Ojulari stated in an update titled “Update on Our Refineries.”
Despite over $3 billion spent on turnaround maintenance in recent years, Nigeria’s refineries — in Port Harcourt, Warri, and Kaduna — have largely remained non-operational. The 60,000-barrel-per-day section of the Port Harcourt refinery briefly resumed operations before shutting down again, while the Warri refinery remains mostly idle. The Kaduna refinery has yet to restart production.
Rising Fuel Import Costs
Nigeria’s dependence on imported fuel continues to strain foreign reserves and pressure the naira. According to National Bureau of Statistics (NBS) data, the country spent ₦4 trillion on fuel imports in the first half of 2025 alone.
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Q1 2025: ₦1.76 trillion in fuel imports
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Q2 2025: ₦2.3 trillion in fuel imports
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Total (H1 2025): ₦4 trillion
For comparison, total fuel import expenditure for the entire year of 2024 stood at ₦15.4 trillion, highlighting the scale of Nigeria’s import dependence despite multiple refinery rehabilitation projects.
The NBS report also revealed that Nigeria imported ₦208.76 billion worth of petrol from ECOWAS countries in Q2 2025, underscoring the continued importance of regional supply chains in meeting domestic demand.
Outlook
The introduction of the new 15% import duty marks a significant shift in Nigeria’s fuel pricing policy, likely resulting in higher pump prices for consumers in the short term. However, government officials argue that the measure is necessary to align import economics, boost fiscal revenues, and encourage local refining capacity — particularly as the Dangote Refinery and other modular refineries ramp up production.
As Nigeria works toward achieving self-sufficiency in refined products, the effectiveness of this policy will depend on how quickly domestic refineries can come online and offset the impact of rising import costs on consumers.
