Nigerians are preparing for another wave of higher fuel prices as the Federal Government moves to introduce a 15 percent import tariff on Premium Motor Spirit, better known as petrol. Price analysis reveals that this new policy will push the country’s annual fuel import bill up by nearly ₦1 trillion. According to estimates, Nigerians could pay around ₦973.6 billion more each year once the tariff takes effect, a development that threatens to deepen inflation and raise living costs across all sectors of the economy.
The figures come from data compiled from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, which tracked petrol import volumes between January and September 2025. The report showed that Nigeria imported an average of 26.75 million litres of petrol every day during that period. Using the government’s proposed import tariff rate of ₦99.72 per litre, the total daily tariff cost would amount to about ₦2.67 billion. Over a full year, this translates to roughly ₦973.64 billion in additional costs — money that will ultimately come from consumers through higher pump prices.
For millions of Nigerians already struggling with high transportation costs and rising food prices, this development adds another layer of economic pressure. The government, however, argues that the new import tariff will generate much-needed revenue, boost local refining, and strengthen the naira-based oil economy.
President Bola Tinubu approved the tariff plan on petrol and diesel after receiving a proposal from the Executive Chairman of the Federal Inland Revenue Service, Zacch Adedeji. The proposal sought to introduce a 15 percent duty on the cost, insurance, and freight value of imported petroleum products. According to the FIRS, this measure aims to align import prices with domestic production realities and ensure that duty-free imports do not undercut newly revived local refineries.
In his memo to the President, Adedeji explained that the tariff forms part of the government’s fiscal and energy reforms under the Renewed Hope Agenda. He said the policy would help stabilize fuel prices, promote energy security, and encourage investments in local refining. The FIRS chairman also advised the government to create a transparent system for collecting and managing the new revenue. He proposed a dedicated Federal Government account under the supervision of the Nigeria Revenue Service, with verification handled by the regulatory authority.
Adedeji emphasized that the move was not just about generating more income but about correcting long-standing market distortions. He stated that duty-free fuel imports had created an uneven playing field, discouraging domestic refineries from competing effectively. By introducing this tariff, he argued, Nigeria could reduce its dependence on imported fuel, protect emerging local industries, and build a more self-reliant energy sector.
At current pricing levels, the 15 percent tariff adds roughly ₦99.72 to each litre of imported fuel. That increment, Adedeji said, pushes imported fuel costs closer to locally refined prices without making petrol unaffordable for consumers. He called the measure “corrective rather than punitive,” insisting that it balances fiscal discipline with industrial protection.
Despite the government’s assurances, the new policy has triggered intense debate. Critics warn that the tariff could drive fuel prices higher and worsen inflation just months before the festive season, when demand for petrol typically spikes. Industry experts, petroleum marketers, and economists have questioned the timing of the policy, saying it risks stifling an already fragile economy.
The Independent Petroleum Marketers Association of Nigeria has voiced strong reservations about the move. The association’s National Publicity Secretary, Chinedu Ukadike, said that while marketers respect the President’s directive, they believe the policy undermines the principles of market deregulation. He argued that true liberalization should allow free competition and not create artificial barriers that favor one section of the industry over another.
Ukadike said deregulation was meant to promote a “willing buyer, willing seller” system, not a market where the government imposes tariffs that tilt the balance. He advised the Federal Government to focus on incentivizing local refineries rather than penalizing importers. In his view, when local refining becomes cheaper and more efficient, importers will naturally shift their focus without the need for extra tariffs.
He explained that the government could better support local producers by supplying crude oil at discounted rates and lowering taxes for refiners. According to him, such policies would make local refining more attractive and competitive. He added that when domestic production meets demand at affordable rates, fuel importation will naturally decline without coercion.
Ukadike also warned that the tariff could push up prices across the board, especially as Nigerians prepare for the Christmas and New Year travel season. He said every naira added to fuel costs affects transportation fares, food prices, and the general cost of living. He urged the government to prioritize stability by ensuring steady supply from local refineries and collaborating closely with stakeholders to prevent scarcity.
Meanwhile, economic analysts have also joined the discussion. The Chief Executive Officer of PetroleumPrice.ng, Jeremiah Olatide, described the policy as a “double-edged sword.” While it could help the government generate more revenue, he said, it would also worsen the financial burden on ordinary Nigerians. Olatide confirmed that projections of an additional ₦1 trillion in petrol expenses are realistic and could even increase depending on market fluctuations and global oil prices.
He noted that the timing of the policy could not have been worse. Nigerians are still adjusting to life without fuel subsidies, and many households now spend a large portion of their income on petrol and transportation. He said that while it makes sense for the government to seek new revenue streams, doing so at a time of economic hardship could backfire.
Olatide pointed out that the removal of fuel subsidy two years ago had already triggered sharp inflation, raising prices of food, rent, and other essentials. Adding a 15 percent import tariff, along with a proposed five percent surcharge, he warned, could intensify inflationary pressure. He suggested that the government should instead prioritize domestic capacity building, including the use of naira-for-crude arrangements to support local refineries.
He also predicted that despite the higher import costs, some traders would continue importing fuel. “Importers always find a way to adapt,” he said, noting that this persistence will continue to influence pump prices upward. He urged the government to look beyond short-term revenue gains and focus on strengthening local production and refining efficiency.
Olatide emphasized that Nigeria must aim for sustainable production of at least three million barrels of crude oil daily to ensure long-term price stability. He argued that when local refining reaches full capacity, market confidence will rise, and fuel prices will drop naturally.
The Petroleum Products Retail Outlets Owners Association of Nigeria also weighed in on the matter. Its President, Billy Gillis-Harry, described the new tariff policy as a “bold but risky” attempt to protect domestic refineries. He said the decision could stabilize the market if properly implemented but could also lead to fuel scarcity if importers withdraw from the market due to increased costs. He called on the Nigerian National Petroleum Company Limited to expedite work on its refinery partnerships to ensure production begins before the end of the year.
Gillis-Harry warned that failure to achieve local refining before December could result in severe fuel shortages during the festive season, further straining Nigerians already dealing with high prices.
Despite widespread skepticism, some business advocacy groups have applauded the government’s decision. The Centre for the Promotion of Private Enterprise described the policy as a strategic step toward reviving Nigeria’s industrial base and achieving economic independence.
The centre’s Director, Muda Yusuf, said the import tariff aligns with global best practices in industrial protection and could help strengthen domestic capacity. He argued that many successful industries, such as cement, flour, and beverages, initially grew under similar protectionist policies. Yusuf explained that the aim is not to isolate Nigeria economically but to give local industries time and space to mature before competing globally.
The centre emphasized that strategic protectionism, when well-implemented, can promote job creation, increase local value addition, and reduce foreign exchange demand. Yusuf also noted that this kind of tariff protection has worked for other industries and could help emerging refineries like Dangote Refinery, the NNPCL plants, and smaller modular refineries compete more effectively.
However, Yusuf cautioned that tariff protection alone would not solve the sector’s challenges. He said the government must back the policy with supportive fiscal measures such as affordable loans, reliable power supply, and better infrastructure. Without these, he warned, the cost of production will remain high, and consumers will continue to suffer.
He added that transparency and accountability in revenue management are critical to ensuring that the benefits of the tariff reach the broader economy. Yusuf concluded that the government’s approach must balance industrial protection with consumer welfare, so Nigerians are not overburdened by the policy.
In the end, the introduction of a 15 percent import tariff on petrol may help Nigeria’s refining ambitions in the long term, but in the short term, it promises to test the resilience of both businesses and households. As policymakers celebrate potential revenue gains, Nigerians brace for another round of price hikes that could ripple through transport, food, and housing sectors. Whether this policy strengthens local production or becomes another economic setback depends on how the government manages its rollout and how soon domestic refineries can rise to meet demand.