In a bold and controversial economic move, President Bola Ahmed Tinubu has approved a 15 percent ad-valorem import duty on petroleum products — specifically petrol and diesel — a decision that could dramatically alter the pricing structure of fuel in Africa’s largest economy. The directive, issued via a confidential presidential letter dated October 21, 2025, and signed by Damilotun Aderemi, the President’s private secretary, was addressed to both the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The letter, sighted by TheCable and confirmed by multiple administration insiders, reveals that Tinubu’s approval followed an earlier request by the FIRS to impose a uniform 15 percent import duty on the cost, insurance, and freight (CIF) value of imported petroleum products. The tax, the FIRS argued, would “align import costs with domestic realities” and “ensure equity and revenue sustainability in the downstream sector.”
However, the implications of this move go far beyond bureaucratic fiscal alignment. The decision to impose import duties on refined petroleum products — particularly on premium motor spirit (PMS, commonly known as petrol) and automotive gas oil (diesel) — has reignited debates over the government’s economic direction, fuel policy, and the viability of Nigeria’s long-promised energy self-sufficiency.
The Economic Context
President Tinubu’s administration, now in its second year, continues to wrestle with the aftermath of two explosive reforms: the removal of fuel subsidies and the unification of the foreign exchange rate. Both policies, while applauded by international lenders and fiscal conservatives, have triggered severe inflationary pressure, eroded purchasing power, and deepened poverty levels across Nigeria.
The new 15 percent import duty — if fully implemented — will raise fuel prices even further. Based on current import data and cost models, analysts estimate that petrol could increase by roughly ₦99.72 per litre, while diesel prices may climb by a similar margin. In a country already reeling from record-high living costs, the prospect of another surge in energy prices has left many citizens anxious and business leaders alarmed.
According to an internal memo from the NMDPRA obtained by DOYA News, the government currently relies almost entirely on private marketers to import refined fuel products since local refineries — including the much-celebrated Dangote Refinery — have yet to achieve stable, large-scale domestic supply. The memo warns that any new duty imposed on imports will directly translate to higher pump prices unless offset by government subsidies — a mechanism Tinubu’s administration has repeatedly vowed to avoid.
A Policy Rooted in Fiscal Necessity
Behind the scenes, officials say the move reflects desperation within the federal government to raise revenue amid collapsing oil earnings and spiraling public expenditure. Nigeria’s debt service-to-revenue ratio now hovers around 90 percent, leaving little room for fiscal maneuver.
A senior FIRS official familiar with the proposal explained that the import duty was designed to serve multiple purposes. “We’re not just targeting fuel importers,” the official said. “This is part of a broader effort to stabilize customs and tax collection, capture leakages in petroleum importation, and reduce arbitrage opportunities that have become rampant since deregulation.”
Nigeria currently loses billions of naira annually to unreported or undervalued petroleum imports, where traders manipulate CIF declarations to pay lower tariffs. The 15 percent ad-valorem tax, applied strictly on accurate shipment valuations, could generate hundreds of billions in additional revenue annually.
But critics argue that the timing is both economically and politically tone-deaf. “You can’t raise fuel taxes when inflation is above 30 percent and citizens are barely surviving,” said economist and policy analyst Dr. Bismarck Rewane. “What this shows is that the fiscal crisis has reached a point where the government is scraping every possible source of revenue, even if it hurts consumers.”
Industry Reactions: Panic and Pushback
Fuel importers and marketers are already pushing back. The Major Oil Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN) have reportedly begun emergency consultations to assess the impact of the new policy.
One senior IPMAN member, who spoke on condition of anonymity, described the move as “an ambush on the downstream sector.” “We were never consulted,” he said. “This means we’ll either pass the cost to consumers or halt imports altogether until we can renegotiate prices. That could trigger another round of fuel scarcity.”
Already, whispers of potential shortages have begun circulating among retail operators in Lagos and Abuja. Several independent stations told DOYA News they were considering suspending sales until the government clarified whether the new tax would be implemented immediately or phased in.
Adding to the uncertainty is the unclear status of local refining. While the 650,000-barrel-per-day Dangote Refinery has begun partial operations, the facility remains reliant on imported crude and operates below full capacity. The Port Harcourt Refinery, which the government promised would resume output by mid-2024, continues to face technical delays.
“Until Nigeria refines most of its own fuel, any import duty on petrol or diesel is effectively a tax on every Nigerian,” said energy economist Jide Ojo. “The irony is that even local refiners import crude at international prices and pay taxes, so costs will still rise either way.”
Public Outrage and Political Fallout
Public reaction has been swift and furious. Across social media platforms, Nigerians voiced outrage over what many described as yet another “anti-people” policy by a government perceived to be detached from the struggles of ordinary citizens.
“First, you remove subsidy, then you float the naira, now you want to tax imported fuel,” one user wrote on X (formerly Twitter). “This administration has declared war on the poor.”
Civil society groups, including the Labour and Civil Society Coalition (LASCO), have also vowed to challenge the decision. In a statement, LASCO warned that the import duty would “exacerbate hardship and push millions more Nigerians below the poverty line.”
“The government cannot continue to squeeze the people to fund its inefficiency,” the statement read. “We demand an immediate reversal of this directive and a full audit of all petroleum-related taxes and levies imposed since the so-called deregulation policy began.”
The Nigerian Labour Congress (NLC) has reportedly scheduled an emergency meeting to decide whether to issue a nationwide strike notice in protest.
Behind the Policy: Political Calculus and Global Pressure
Within the Tinubu administration, insiders say the President weighed the decision carefully before approving it. Multiple government sources confirmed that the directive followed extensive consultations between the FIRS, the NMDPRA, and the Ministry of Finance, which had pushed for the duty as part of Nigeria’s ongoing fiscal reform commitments under its World Bank-backed Economic Stabilization and Growth Framework.
The World Bank and IMF have consistently pressured Nigeria to improve non-oil tax revenue, arguing that the country’s tax-to-GDP ratio, at about 10 percent, is one of the lowest in the world. The 15 percent import duty, they believe, would help close fiscal gaps without reinstating direct fuel subsidies.
However, political observers note that the move carries heavy risks. “No Nigerian president since independence has survived politically by raising fuel prices twice within two years,” said political analyst Samaila Abdullahi. “Tinubu’s economic team is betting that his reputation as a reformer will hold, but history shows Nigerians have a breaking point when it comes to fuel.”
Indeed, fuel policy has been the graveyard of many Nigerian political ambitions. The 2012 Occupy Nigeria protests, triggered by former President Goodluck Jonathan’s removal of fuel subsidies, nearly paralyzed the country and forced a government reversal.
A Hidden Agenda?
Some analysts suspect the import duty could also be a strategic attempt to tilt the domestic fuel market toward local refining, particularly in favor of the Dangote Refinery, which is seen as crucial to Tinubu’s economic legacy.
By making imported fuel more expensive, the policy could create a pricing advantage for locally refined products, even if Dangote’s production remains limited in the short term. “It’s a form of indirect protectionism,” said energy policy researcher Zainab Musa. “Tinubu may be trying to force the market to transition from import dependency to domestic supply — but the question is, at what cost to consumers?”
Others, however, warn that this strategy could backfire if local refineries fail to deliver consistent output. “Protectionism without capacity is self-sabotage,” Musa added. “If imports slow down before local supply ramps up, we could see scarcity worse than what happened after the 2023 subsidy removal.”
Revenue vs. Reform
For the government, the 15 percent duty represents both a fiscal lifeline and a political gamble. With the 2025 budget already strained by debt repayments, wage obligations, and capital expenditure shortfalls, the Tinubu administration faces enormous pressure to show tangible fiscal progress ahead of the 2026 midterm political cycle.
The Presidency, meanwhile, has sought to portray the move as part of a larger economic correction. “This administration is committed to building a self-sustaining economy where revenues match expenditures and subsidies do not undermine development,” a senior aide said.
Still, even some within Tinubu’s camp privately admit the rollout could have been better managed. “This was supposed to be a phased fiscal adjustment tied to refinery output,” another adviser told DOYA News. “The leak of the letter before the official announcement has created unnecessary panic.”
The Road Ahead
As of late October 2025, both the FIRS and NMDPRA are finalizing the implementation framework. Insiders say the agencies have been instructed to begin enforcement by early November, though it remains unclear whether the government will introduce temporary waivers to cushion the immediate impact on consumers.
In Abuja and Lagos, fuel marketers are already recalculating prices, with some predicting petrol could soon cross ₦1,200 per litre — a figure that could send shockwaves through Nigeria’s fragile economy. Transport unions have warned of fare increases, while manufacturers predict another spike in production costs.
For now, Nigerians are bracing for what could be yet another inflationary storm. The question many are asking is whether this is another short-term fix to a long-term fiscal crisis — or a strategic, albeit painful, step toward an economically independent Nigeria.
If history is any guide, the success or failure of this 15 percent import duty will not be measured merely by revenue gains but by how it reshapes the nation’s fuel economy, public trust, and Tinubu’s reform legacy.
For President Tinubu, whose administration has defined itself by hard choices, the latest fuel policy may yet prove to be his most defining — and divisive — gamble.
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