Nigerians are about to pay as much as N150 higher per litre of petrol and higher than that on diesel, after the Bola Tinubu-led administration approved a 15 per cent tariff on imported fuels, implementation of which will commence immediately.
However the document stated that the impact will not exceed N100 addition per litre.
The document seen by THISDAY on Wednesday copied the Attorney General of the Federation, Lateef Fagbemi; Executive Chairman Federal Inland Revenue Service (FIRS), Zacch Adedeji and the Authority Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, confirmed the development.
The request approved by the President stated that the proposal to introduce a ‘measured import tariff’ on Premium Motor Spirit (PMS) and Diesel, was aimed at reinforcing national energy security, safeguarding local refining capacity, stabilising the downstream market, and ensuring a fair and competitive pricing environment aligned with the the President’s agenda.
“Your Excellency may wish to recall that on 29th July 2024, via Federal Executive Council Memo EC 9 (2024) 4, you graciously approved the settlement of crude oil dedicated to domestic consumption in Naira, alongside the sale of the refined products therefrom in Naira.
“The core objective of this initíative is to operationalise crude transactions in local currency, strengthen local refining capacity, and ensure a stable, affordable supply of petroleum products across Nigeria – aligning with Your Excellency’s Renewed Hope Agenda for energy security and fiscal sustainability.
“However, Your Excellency may wish to additionally note that while domestic refining of PMS has begun to increase, and local sufficiency in Diesel production has been achieved, price instability persists, partly due to misalignment between local refiners and marketers.
“Import parity remains the benchmark for pricing but often sits below the cost recovery point of local producers, particularly during currency and freight fluctuations. Left unchecked, these risks undermine our nascent refining sector at the very point of recovery. The Government’s responsibility is therefore twofold: to protect consumers and domestic producers from unfair pricing practices and collusion, while simultaneously ensuring a level playing field that allows domestic refiners to cover costs and attract continued investment,” the official communication stated.
Pursuant to the above, and with the goal of driving a sustainable, fair, and equitable ecosystem, the letter detailed by a personal aide of the President proposed that the tariff framework be introduced.
This framework, the official communication said, is designed to prevent duty-free imports from undercutting local refineries, while maintaining healthy competition and protecting consumers.
“In line with the objectives of Your Excellency’s earlier approval, it strengthens the local value chain, stabilises prices, and incentivises investment into refining and logistics infrastructure. In alignment with the updated technical proposal, it is recommended that an ad-valorem import duty of 15 per cent be introduced on PMS and Diesel, applied to the Cost, Insurance, and Freight (CIF) value at discharge.
“At current CIF levels, this represents an increment at approximately N99.72 per litre, which nudges imported landed costs toward local cost-recovery without choking supply or inflating consumer prices beyond sustainable thresholds.
“Even with this adjustment, estimated Lagos pump prices would remain in the range of N964.72 per litre ($0.62), still significantly below regional averages such as Senegal ($1.76 per litre), Cote d’Ivoire ($1.52 per litre), and Ghana ($1.37 per litre),” the request acceded to by the President stated.
The proponents argued that the tariff is not revenue-driven but corrective, aimed at aligning import costs with domestic realities while preserving affordability.
According to the document, payments would be made into a designated Federal Government of Nigeria (FGN) revenue account under the Nigeria Revenue Service (NRS), with verification by the NMDPRA before discharge clearance.
While the document suggested that implementation would commence after a 30-day transition window, allowing importers to adjust cargoes already in transit and ensuring a smooth rollout without market disruption, however it indicated that the President minuted that it should begin immediately. “Approved as Prayed for Implementation Immediately,” the Nigerian leader wrote.
The letter continued: “Sections 71 and 72 of the Petroleum Industry Act (PIA) provide the legal basis for the proposed import tariff. Section 71 (a) and (b) empowers the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to issue Regulations imposing public service obligations on licensees in relation to matters which include security of supply, economic development, and the achievement of wider economic policy objectives.
“Section 72 went further to authorise NMDPRA to provide for the recovery of any additional costs incurred in complying with the public service obligations through a public service levy, which may be imposed on customers, provided that it would be in the wider public interest.
“Public service obligations’” are defined under section 318 of the PIA to mean: specific obligations imposed by the Authority on licensees in relation to security of supply, social service, economic development, environmental protection or the use of indigenous materiais.
“Accordingly, Your Excellency can achieve this by giving policy directives to NMDPRA under section 3(4) of the PIA the 15 per cent import tariff on PMS and Diesel, which shall be published in the Federal Government gazette,” it added.
In line with the above, the letter stated that operationalisation will be straightforward and transparent as tariffs will be collected into a designated federal government revenue account issued by the FIRS, now NRS.
In addition, it stated that end-to-end digital verification will be linked to NMDPRA discharge clearance, ensuring no cargo is released without proof of payment, while Customs and NMDPRA will update import templates, supported by a public compliance notice to minimise speculation and rumour-driven volatility.
“A 30-day transition period will be observed to allow market participants to adjust cargoes already in transit. In conclusion, this reform will accelerate Nigeria’s path toward fuel self-sufficiency, protect consumers and investors alike, and stabilise the downstream petroleum market. It represents another bold step in Your Excellency’s legacy of reforms that continually strengthen the sustainability and competitiveness of our energy ecosystem.
“In view of the foregoing, Your Excellency is respectfully invited to consider and, if deemed appropriate: Approve the introduction of a 15 per cent ad-valorem import duty on Premium Motor Spirit (PMS) and Diesel, to be assessed on the Cost, Insurance, and Freight (CIF) value at discharge, with all payments made into a designated Federal Government of Nigeria (FGN) revenue account and verified by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) prior to discharge clearance.
“Direct the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigeria Customs Service (NCS) to implement a 15 per cent import duty on Premium Motor Spirit & Diesel, with effect after a 30-day transition period from the date of official notification.
“Direct the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the regulator, to issue appropriate Regulations in this regard and take local production into account first before the issuance of import licenses.
“Direct a periodic review of the tariff rate and its continued necessity, including provisions for scaling or sunset measures, as domestic Premium Motor Spirit (PMS) refining capacity expands, under the oversight of the Implementation Committee on Crude and Refined Products Sales in Naira,” the letter stated.
However, THISDAY learnt that the development has led to apprehension in the downstream sector of the petroleum industry, as many argue that the country does not have enough refining capacity to add a 15 per cent tariff on imported fuel.
Nigeria currently imports over 60 per cent of its refined petroleum products, while less than 40 per cent is sourced locally, almost solely from the Dangote refinery.
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