Nigerians could spend an additional ₦973.6 billion annually on petrol following the Federal Government’s approval of a 15 per cent import tariff on Premium Motor Spirit (PMS), according to a price analysis by The PUNCH.
Documents obtained from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) revealed that the country imported an average of 26.75 million litres of petrol daily between January and September 2025. At the proposed import tariff rate of ₦99.72 per litre, the tariff amounts to ₦2.67 billion daily, translating to almost ₦1 trillion yearly a cost that consumers will inevitably bear through higher pump prices.
The new import tariff, approved by President Bola Tinubu, also applies to diesel and is expected to take effect after a 30-day transition period ending November 21, 2025. The approval was conveyed through a letter signed by Tinubu’s Private Secretary, Damilotun Aderemi, following a proposal by Federal Inland Revenue Service (FIRS) Chairman Zacch Adedeji.
Adedeji said the measure forms part of ongoing fiscal and energy reforms aimed at strengthening the naira-based oil economy, encouraging local refining, and ensuring price stability. He explained that the tariff seeks to align import costs with domestic market realities while discouraging duty-free imports that undermine local refineries.
“At current CIF levels, this represents an increment of about ₦99.72 per litre. The core objective is to strengthen local refining capacity and ensure stable, affordable fuel supply across Nigeria,” Adedeji stated.
He emphasised that the policy was not primarily revenue-driven but corrective, designed to level the playing field for emerging domestic refineries such as Dangote Refinery and the NNPC Limited’s rehabilitated plants.
Industry Reactions: Widespread Concerns
Despite government assurances, the new tariff has drawn mixed reactions from industry stakeholders, with many warning of inflationary consequences and potential fuel scarcity during the festive season.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) described the move as inconsistent with market deregulation.
Speaking with The PUNCH, IPMAN’s National Publicity Secretary, Chinedu Ukadike, said the policy could distort competition and discourage private importers.
“Once you liberalise the market and then start favouring one section of the industry against others, you defeat the purpose of deregulation,” Ukadike said.
“The government should incentivise local refiners with tax breaks and crude supply rather than imposing tariffs that will raise prices and hurt consumers.”
He warned that the policy could worsen inflation ahead of the Yuletide period when fuel demand typically surges.
“Any addition in pricing will lead to inflation, especially now that Christmas is approaching. The government must ensure local refining and distribution work seamlessly to prevent scarcity,” he added.
Experts: Revenue Boost or Economic Burden?
Jeremiah Olatide, Chief Executive Officer of PetroleumPrice.ng, described the policy as a “double-edged sword” that could boost government revenue while deepening economic hardship for ordinary Nigerians.
“It’s a smart move to raise revenue amid fiscal constraints, but the timing is wrong. Nigerians are still adjusting to petrol prices between ₦800 and ₦900 per litre. Adding a 15 per cent tariff will definitely push up inflation,” Olatide warned.
He further noted that the tariff, combined with a proposed five per cent surcharge, could compound costs and destabilise the market.
“The government could have supported local refineries through naira-for-crude deals instead. With multiple taxes and duties, a price drop seems far away,” he said.
Retailers Warn of Possible Fuel Shortage
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) urged the government to ensure local refineries begin operations before December to avert scarcity and price hikes.
PETROAN President, Billy Gillis-Harry, described the policy as bold but risky.
“If poorly implemented, it could cripple importation and cause fuel scarcity. The NNPC must fast-track refinery production to stabilise supply before year-end,” he cautioned.
Support for the Policy: CPPE Endorses Move
In contrast, the Centre for the Promotion of Private Enterprise (CPPE) backed the government’s decision, calling it a strategic step toward reviving Nigeria’s industrial base.
CPPE Director, Muda Yusuf, said the measure was a form of “strategic protectionism” intended to safeguard local refineries and promote economic self-sufficiency.
“Sectors like cement and flour grew because of targeted protection. If well implemented, this tariff could help domestic refiners scale up and compete globally,” Yusuf noted.
However, he cautioned that protection alone would not guarantee success, urging the government to complement it with low-cost financing, stable power supply, and infrastructure investment.
“Strategic protectionism is not about closing borders but building local capacity to engage the global economy from a position of strength,” Yusuf added.
The Road Ahead
While the 15 per cent tariff is expected to enhance government revenue and protect local industries, the immediate implication for Nigerians is clear higher petrol prices and a potential ripple effect on transportation, goods, and overall inflation.
As the policy takes effect later this month, industry players warn that its success will depend on transparent implementation, support for local refineries, and a clear strategy to cushion the impact on consumers already battling rising living costs.