Nigerians may spend almost N1tn extra every year on petrol once the Federal Government implements its newly approved 15% import tariff on Premium Motor Spirit (PMS), according to a price analysis by The PUNCH.
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority shows that between January and September 2025, the country imported an average of 26.75 million litres of petrol daily. With the proposed tariff of N99.72 per litre, daily tariff payments could reach N2.67bn, amounting to N973.64bn yearly—a cost expected to be passed on to consumers through increased pump prices.
The tariff—approved by President Bola Ahmed Tinubu and conveyed via a letter signed by his Private Secretary, Damilotun Aderemi—was recommended by Federal Inland Revenue Service Chairman Zacch Adedeji. It seeks to impose a 15% duty on the CIF value of imported petrol and diesel to align import costs with domestic market realities and support local refining.
Adedeji explained that the measure is part of wider fiscal and energy reforms aimed at stabilising the naira, boosting domestic refining, and ensuring long-term energy security. He noted that while the initiative is not designed primarily to raise revenue, it is expected to discourage duty-free imports that undermine emerging local refineries.
Growing Concern Across the Oil Sector
Despite government assurances, the approval has triggered significant backlash from oil sector stakeholders who warn that the tariff could raise fuel prices, worsen inflation, and increase operational costs for businesses.
IPMAN’s National Publicity Secretary, Chinedu Ukadike, said the policy contradicts the principles of a deregulated market. According to him, favouring local producers through tariffs risks distorting competition and discouraging importers.
He argued that the government should instead incentivise local refineries by supplying crude and easing taxes, rather than imposing additional costs on fuel imports. Ukadike further cautioned that any upward adjustment in petrol pricing would fuel inflation—especially as the festive season approaches.
PetroleumPrice.ng CEO, Jeremiah Olatide, described the tariff as a “double-edged sword”—one that could raise government revenue but deepen economic hardship. He agreed that Nigerians may indeed pay close to N1tn more annually for fuel, warning that multiple levies, including a planned 5% surcharge, may intensify inflationary pressure.
Olatide added that the tariff might not eliminate fuel imports, as traders could still pursue importation and transfer the added cost to consumers.
Calls for Government Strategy and Market Stability
Olatide and other industry experts stressed that the government should prioritise stabilising crude production, expanding local refining capacity, and encouraging a naira-for-crude policy to lower production costs and improve price stability.
PETROAN President, Billy Gillis-Harry, expressed support for measures protecting local refineries but warned that poor execution could result in scarcity and job losses. He urged the government to fast-track refinery revitalisation to avert potential shortages during the Yuletide season.
CPPE Supports the 15% Tariff
The Centre for the Promotion of Private Enterprise (CPPE), however, backed the new policy, calling it a strategic protectionist measure designed to rebuild Nigeria’s industrial capacity. Director Muda Yusuf said decades of overdependence on imports have weakened local industries and exposed the economy to global shocks.
CPPE noted that similar protectionist policies helped industries such as cement and flour grow significantly. It emphasised that the new tariff is not about isolationism but about enabling domestic refineries—including Dangote Refinery, NNPCL facilities, and modular plants—to compete fairly with cheaper imports.
The organisation added that protection alone is insufficient, urging the government to complement the tariff with tax incentives, low-interest financing, reliable energy supply, and infrastructure upgrades to ensure long-term industrial sustainability.
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