Nigeria imposes 15% import duty on petrol, diesel to support local refiners

In a bid to protect domestic refining investments and reduce dependence on fuel imports, the Nigerian government has approved a 15% import duty on petrol and diesel. The measure was signed into effect by President Bola Tinubu on October 21, 2025, per a presidential memo seen by Reuters.

Policy Rationale & Objectives

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  The duty is part of a broader fiscal reform push aimed at boosting non-oil revenue and restructuring the downstream petroleum sector.

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  It seeks to protect domestic refiners — especially the recently commissioned Dangote refinery — which have faced stiff competition from cheaper imports.

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  According to the memo, the reform is intended to accelerate Nigeria's path toward fuel self-sufficiency, while protecting both consumers and investors and stabilizing the downstream market.

Impact on Domestic Refining

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  The Dangote refinery, a $20 billion facility built to process 650,000 barrels per day, stands at the center of this policy shift.

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  Reports say Dangote has ramped up production in response — currently loading over 45 million litres of petrol and 25 million litres of diesel daily, which in some statements is claimed to exceed domestic demand.

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  The import duty helps level the playing field by discouraging fuel dumping or underpriced imports that undercut refineries.

Effects on Prices & Supply

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  Fuel pump prices currently hover around ₦928 per litre ($0.63).

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  Officials estimate the import duty could add as much as ₦99 per litre to the cost of petrol or diesel.

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  While intended to support self-sufficiency, the measure runs the risk of higher domestic fuel prices — especially if the increased costs are passed to consumers by marketers.

Broader Market Reaction & Observations

The tariff follows last year's removal of fuel subsidies and liberalization of foreign exchange controls, adding to the government's ongoing economic reform agenda. Analysts suggest that for the policy to succeed, refining capacity and supply chains must keep pace, or else importers might still find ways to supply cheaper fuel or jeopardize competition. Fuel traders and stakeholders are watching how importers adapt and whether enforcement will effectively block undervalued imports.