President Bola Tinubu has given presidential approval for a 15% ad-valorem import duty on diesel and Premium Motor Spirit (PMS), popularly called petrol.
The approval was communicated in a letter dated October 21,2025, signed by the President’s Private Secretary, Damilotun Aderemi, and sent to the Attorney General of the Federation and Minister of Justice, the Chairman of the Federal Inland Revenue Service (FIRS) and the Authority Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The move follows an earlier request by FIRS to impose a 15 percent duty on the cost, insurance, and freight (CIF) value of petroleum imports.
According to the FIRS, the tariff aimed at reinforcing national energy security, safeguarding local refining capacity, stabilising the downstream market, and ensuring a fair and competitive pricing environment, in line with President Bola Tinubu’s Renewed Hope Agenda.
FIRS in the letter to the President noted 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.
“Pursuant to the above, and with the goal of driving a sustainable, fair, and equitable ecosystem, the proposed tariff framework is introduced. This framework 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 (15%) be introduced on Premium Motor Spirit (PMS) and Diesel, applied to the Cost, Insurance, and Freight (CIF) value at discharge. At current CIF levels, this represents an increment at approximately #99.72 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 tariff is not revenue-driven but corrective, aimed at aligning import costs with domestic realities while preserving affordability. Payments would be made into a designated Federal Government of Nigeria (FGN) revenue account under the Nigeria Revenue Service (NRS), with verification by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) before discharge clearance. 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.
“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 materials. Accordingly, Your Excellency can achieve this by giving policy directives to NMDPRA under section 3(4) of the PIA to implement the 15 per cent (15%) import tariff on Premium Motor Spirit (PMS) and Diesel, which shall be published in the Federal Government gazette.
“In line with the above, Your Excellency may wish to note that operationalisation will be straightforward and transparent. Tariffs will be collected into a designated Federal Government revenue account issued by the Federal Inland Revenue Service (FIRS), now Nigeria Revenue Service (NRS).
“End-to-end digital verification will be linked to NMDPRA discharge clearance, ensuring no cargo is released without proof of payment. Customs and NMDPRA will update import templates, supported by a public compliance notice to minimise speculation and rumor-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,” part of the letter read.
