President Bola Tinubu has approved a 15 per cent ad-valorem import duty on premium motor spirit (PMS), commonly known as petrol, and automotive gas oil (AGO), also called diesel, as part of a broader strategy to strengthen Nigeria’s domestic refining sector and ensure fair competition between imported and locally refined fuels.
The new import duty is expected to raise the landing cost of petrol by approximately ₦99.72 per litre, potentially affecting pump prices nationwide.
The approval, contained in a presidential directive dated October 21, 2025, was communicated to the Federal Inland Revenue Service (FIRS), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and the Nigeria Customs Service.
The directive follows a proposal from the Ministry of Finance and FIRS aimed at aligning Nigeria’s fuel import pricing with domestic production realities while protecting local refineries.
According to the Federal Government, the tariff will be applied to the cost, insurance, and freight (CIF) value of imported petrol and diesel.
The presidency explained that the policy is part of wider reforms to bolster domestic refining capacity and reduce reliance on imported fuel.
It builds on the Federal Executive Council’s July 29, 2024 approval, which allowed crude oil for domestic use and refined products to be traded in naira.
Officials noted that while domestic refining, particularly at the Dangote Refinery, has begun to increase, market instability persists due to misaligned pricing between local refiners and importers.
Import parity pricing, which often determines pump prices, has remained below the cost recovery level for local producers.
The presidency emphasized that “while domestic refining of petrol is gradually improving, misalignment between local refiners and marketers has led to price instability.
The 15 per cent import tariff is designed to protect both consumers and producers by discouraging duty-free imports that undercut domestic refineries.”
The directive further explained that the measure will prevent unfair competition, promote investment in refinery and logistics infrastructure, and ensure that local production remains viable.
Funds collected from the import duty will be deposited into a designated federal account under FIRS oversight, with NMDPRA responsible for verifying compliance before any shipment is released.
The policy is backed by Sections 71 and 72 of the Petroleum Industry Act (PIA), which empower NMDPRA to issue regulations promoting energy security, safeguarding supply, and advancing broader economic objectives, including the imposition of tariffs in the public interest.
Originally proposed to begin after a 30-day transition period to allow importers to adjust, the new tariff is now set to take effect immediately following the presidential directive.
The government also directed that future import licensing prioritise local production capacity before foreign supply is approved. Customs and NMDPRA have been instructed to update import templates, enforce digital verification for all shipments, and issue compliance notices to prevent market speculation.
