Overview: Tinubu’s 15% import duty on petrol and diesel
Nigeria’s President Bola Tinubu has approved a 15 percent ad-valorem import duty on two key fuels: premium motor spirit (PMS), commonly known as petrol, and diesel. The approval comes via a presidential directive dated October 21, 2025, and was brought to light through a formal communication from the presidency’s private secretary to the president. This policy shift marks a significant change in Nigeria’s tariff regime for motor fuels and is poised to influence domestic pricing, supply dynamics, and the broader economic landscape.
What is ad-valorem duty and why it matters
An ad-valorem duty is a tax assessed as a percentage of the value of imported goods. In this case, 15 percent of the declared import value of petrol and diesel will be collected at the port of entry. The policy is intended to support several potential objectives: generating revenue for the government, protecting local refining or alternative energy initiatives, and influencing import patterns to stabilize the domestic market. The precise impact will depend on exchange rates, global oil prices, and how importers price fuels domestically after duty is applied.
Potential economic and consumer impact
The introduction of a 15% import duty on PMS and diesel could have several downstream effects. First, the added cost at the border may translate into higher pump prices, unless the government offsets the burden through subsidies, tax credits, or other fiscal instruments. Second, higher import costs could incentivize investment in domestic refining capacity or accelerated adoption of alternative energy sources. Nigeria has long grappled with fuel subsidies and import dependency, and policymakers often weigh trade protections against consumer affordability and inflationary pressures.
Analysts will be watching how retailers, logistics operators, and transporters adjust to the change. If importers pass the duty to consumers, there could be a near-term inflationary impulse in transport and goods that rely on diesel and petrol. However, the measure could also narrow the country’s import bill over time if it spur shifts toward local production, more efficient vehicle operations, or increased use of rail and other non-road transport methods.
Policy alignment with broader economic goals
As part of Tinubu’s broader economic strategy, the 15% duty may align with aims to diversify revenue sources, fund infrastructure, and improve the efficiency of energy use. Critics may argue about the timing and sequencing, given Nigeria’s inflation pressures and the sensitivity of fuel prices to political considerations. Proponents, meanwhile, may point to long-term gains from tariff-based revenue and the potential stimulative effect on domestic refining investments if the government couples the duty with other incentives.
Implications for the Nigerian energy landscape
The measure arrives as Nigeria continues to grapple with energy security and the challenge of import dependence for motor fuels. With petrol and diesel crucial to transportation, manufacturing, and daily life, policy moves that affect import costs can ripple through multiple sectors. Stakeholders might expect regulatory updates on how the duty is administrated, whether exemptions apply for certain users or contexts, and how the duty interacts with Nigeria’s subsidy regime, exchange rate policy, and local refining efforts.
What to watch next
Key questions for policymakers and the public include: Will the duty be offset by subsidies or targeted relief for low-income households? How will the presidency communicate the rationale to the public, and what monitoring mechanisms will ensure transparency in revenue use? Could this drive accelerated investment in refining capacity or alternative fuels? As Nigeria navigates these questions, readers should follow official briefings and official circulars for specifics on implementation timelines, eligibility, and any phased rollout.
Conclusion: A pivotal fiscal choice with wide-ranging effects
The approval of a 15% ad-valorem import duty on petrol and diesel is a notable fiscal tool in Tinubu’s administration. While the immediate impact on prices and inflation remains to be fully observed, the policy signals a clear intent to recalibrate Nigeria’s fuel import framework. How this policy interacts with other economic reforms, subsidies, and energy initiatives will shape the country’s economic trajectory in the months ahead.
