Oil marketers have described the recent introduction of 15% import duty on petrol and diesel by the Federal Government as very challenging and would lead to an increase in the price of petroleum products.
They said the government is making it difficult for players who are importing petroleum products to make up for the shortfall from the local refiners, who they said are not producing enough to meet local demand.
President Bola Ahmed Tinubu had, some days ago, approved a 15% ad-valorem import duty on diesel and petrol.
The approval by the president followed a request by the Federal Inland Revenue Service (FIRS) seeking his consent to apply the duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel to align import costs with domestic realities.
The FIRS Chairman, Zacch Adedeji, in his memo to the President, explained that the measure was part of ongoing reforms to boost local refining, ensure price stability, and strengthen the naira-based oil economy in line with the administration’s Renewed Hope Agenda for energy security and fiscal sustainability.
However, there have been some mixed reactions over the policy, with some economic experts applauding the move as a welcome development that will discourage importation of petroleum products and support local refineries, while some, especially the oil marketers, have warned that this could signal another round of fuel price increase.
In an exclusive interview with Naijaonpoint, the Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, urged the Federal Government not to use policy to favour some industry players against the majority of the oil marketers.
He asked the government not to use price increase to arm-twist other competitors who could be challenging in terms of pricing.
He also said the high prices of these petroleum products coupled with the introduction of CNG and electric vehicles, will lead to some of the filling stations going obsolete.
On the challenges of the policy, Ukadike said, “This is going to increase the price of petroleum products at the pump. All we’re clamoring for is to see a reduced price with low capital and also return on investment, whereby commuters can be able to use PMS as a source of energy.
“We have also seen serious investment in CNG and electric vehicles and with this, some of our filling stations will go obsolete. So, anything that can encourage downward prices is appreciated by marketers,” he said.
On the protection of local refiners, the IPMAN Spokesperson said, “In a deregulated economy, you don’t regulate to favor other industry players. What you allow is demand and supply, and the forces of the markets to determine price.
“You don’t use a price increase to twist the hands of other competitors who might be challenging in terms of pricing. In as much as we encourage indigenous refiners, we also encourage lower pricing.
“You know, when you go to buy rice, sometimes you see local rice is even becoming more expensive than foreign rice.
“We don’t have enough local refiners. Dangote is not producing sufficiently. So, why are we now making it difficult for people who are bringing in products to compete? What governments should do is to remove unnecessary taxations on those trying to build a refinery and trying to acquire licenses.
“Remove some of these bottlenecks and encourage other local refiners with funding so that there will be serious competition that will lead to price reduction.’’
“Remove some of these bottlenecks and encourage other local refiners with funding so that there will be serious competition that will lead to price reduction.’’
Also, giving his own opinion, an economic expert from the Department of Economics at the Nasarawa State University, Paul Adams, said that although the policy is a well-intentioned move to strengthen Nigeria’s domestic refining capacity, he noted that it poses logistical and pricing challenges in the short term.
He pointed out that the duty could tighten margins and disrupt supply consistency until domestic production fully stabilizes.
Adams said, ‘’Well, the 15% import duty on petrol and diesel represents a strategic but double-edged policy decision.
“On the positive side, it is a well-intentioned move to strengthen Nigeria’s domestic refining capacity and reduce the country’s historic dependence on imported petroleum products. By imposing a tariff on imported fuel, the government effectively creates a level playing field for local refiners — particularly the Dangote Refinery and modular refinery operators — who face higher production costs due to limited infrastructure and financing constraints. This form of protective tariff aligns with global best practices for nurturing emerging industrial capacity.
“However, in the short term, it poses logistical and pricing challenges for oil marketers and consumers. Importers will likely pass the additional cost to end users, potentially increasing pump prices and transportation costs,” he said.
According to him, this could intensify inflationary pressures, especially in a market where consumer purchasing power is already weak.
“For independent marketers who rely heavily on imports due to limited local supply, the duty could tighten margins and disrupt supply consistency until domestic production fully stabilizes,” he added.
Meanwhile, in its explanation, the presidency said the recently introduced 15% import duty on petrol and diesel was designed to make these imported products less competitive and encourage local refining.
It stated that the policy will also boost domestic capacity and ensure that Nigeria’s oil wealth translates directly into national prosperity.
The Special Adviser to the President on Media and Public Communication, Sunday Dare, stated that this will reverse the disturbing trend of Nigeria’s heavy reliance on imported petroleum products despite being a leading crude oil producer and conserve foreign exchange.
The presidential spokesman noted that with this policy, the federal government is shifting the market to favour local refineries such as Dangote and other modular plants.
He pointed out that the increase in local refining and supply will help in the moderation of prices as well as expand jobs, investment and industrial activity.