Tinubu Approves 15 % Import Duty on Fuel to Boost Local Refining
By Inemesit Friday
President Bola Tinubu has approved the introduction of a 15 percent ad valorem import duty on petrol and diesel brought into the country. The policy is expected to support growth in the domestic refining sector and stabilise the downstream petroleum market, although it may lead to a rise in pump prices.
The approval, contained in a letter dated October 21 and addressed to the Federal Inland Revenue Service and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, directed the immediate implementation of the new duty regime. The letter, signed by the President’s Private Secretary, Damilotun Aderemi, followed a proposal by the Executive Chairman of the FIRS, Zacch Adedeji.
The proposal recommended a 15 percent duty on the cost, insurance and freight value of imported petrol and diesel to better align import costs with local market realities.
Adedeji explained that the tariff is part of ongoing reforms aimed at increasing local refining capacity, achieving market stability and strengthening the naira based oil economy in line with the administration’s Renewed Hope Agenda for energy security and fiscal sustainability.
He noted that while diesel production has reached self sufficiency and domestic capacity for petrol refining is expanding, price instability persists largely due to differences between local production costs and import parity pricing.
According to him, the government must protect consumers and domestic refiners from unfair pricing practices that could undermine the development of Nigeria’s refining sector. He stated that the new tariff structure would discourage duty free imports from undercutting local producers, while creating a fair and competitive marketplace.
Projections contained in the presidential approval showed that the 15 percent duty could increase the landing cost of petrol by about N99.72 per litre. Even with this adjustment, Lagos pump prices are expected to remain within an estimated N964.72 per litre, which is still below current averages in Senegal, Cote d’Ivoire and Ghana.
The policy is coming at a time Nigeria is intensifying efforts to reduce dependence on fuel importation and boost domestic refining. The 650,000 barrels per day Dangote Refinery has commenced the production of diesel and aviation fuel, while modular refineries in Edo, Rivers and Imo states have begun small scale petrol refining. Despite these improvements, imported petrol still accounts for about 67 percent of national demand.
