Petroleum marketers have raised the alarm that the pump price of Premium Motor Spirit, popularly known as petrol, may exceed ₦1,000 per litre following President Bola Tinubu’s approval of a 15 per cent ad valorem import tariff on fuel imports.

Naijaonpoint reports that the new policy, contained in a presidential directive dated October 21, 2025, takes effect after a 30-day transition period that will end on November 21, 2025.

According to the Federal Government, the measure aims to protect local refineries, such as the Dangote Refinery and state-owned plants, from cheap imports that threaten domestic refining and investment growth.

However, depot operators and oil marketers who spoke to The PUNCH said that the move could have dire economic consequences, potentially pushing petrol prices beyond the reach of Nigerians already burdened by inflation and subsidy removal.

‘Fuel May Go Above ₦1,000/Litre’ – Depot Operators

Several depot operators familiar with the situation, who spoke to the media platform on condition of anonymity, warned that the policy could backfire by increasing pump prices further.

“As it is, the price of fuel may go above ₦1,000 per litre. I don’t know why the government will be adding more to people’s suffering,” one of the operators said.

Another depot owner claimed that some importers were already aligning their pricing structure with that of the Dangote Refinery, leading to uniform price hikes across the market.

“Unfortunately, some of the importers are working in alignment with Dangote, which is why the last price increase was general; all players raised their prices at once. Let’s just wait and see what happens next,” he said.

A third operator cautioned that without a clear framework to stabilise market forces and ensure competition, the new tariff could trigger another round of fuel scarcity and worsen the hardship faced by consumers.

Policy May Lead to Price Hike, Monopoly Fears – IPMAN

Speaking on the development, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, acknowledged that the 15 per cent tariff could discourage importation but warned of its side effects.

“The 15 per cent tariff on imported fuel has its own implications. Maybe the price will go up, and equally, it will discourage importers from bringing in fuel if it becomes too costly,” he said.

Fashola noted that the government was trying to protect domestic refiners but said the policy could create an uneven market.

“People will see it as a way of monopolising the industry for certain people. At the same time, the government aims to protect the local refiners,” he stated.

The IPMAN leader further warned that the failure of local refineries to meet national demand could trigger widespread fuel scarcity.

“If the local refiners fail, it will have its own implications. It may lead to scarcity, and people will not have an alternative. So, it has both positive and negative effects,” he added.

Fashola expressed confidence that the Federal Government would act within the Petroleum Industry Act (PIA), which provides guidelines for tariff and pricing reforms.

“I don’t think the government will do anything outside the law. Everybody would like to see that our local refineries are surviving, which is good for our economy,” he said.

He advised the Nigerian National Petroleum Company Limited (NNPCL) to speed up rehabilitation of the Port Harcourt, Warri, and Kaduna refineries, while encouraging private players like BUA to join in to avoid monopoly concerns.

“If all NNPC refineries can come on board, it will solve a lot of problems,” Fashola said. “When other private refineries like BUA come up, the fear of monopoly will no longer exist, and competition will be good for the system.”

Policy Not Entirely New, But Must Be Reviewed – PETROAN

However, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, described the tariff as a “win-win policy” that should still be monitored closely.

“Our expectation is that at some point, it might be reviewed. What we want is product availability and affordability. We must keep an eye on both,” he said.

Gillis-Harry warned that excessive dependence on Dangote Refinery could hurt the market.

“As it is today, everybody is working with Dangote, but we know Dangote cannot satisfy the country. So, there has to be a mix to ensure availability,” he added.

FG Defends Policy, Says It Will Stabilise Market and Boost Refining

Documents obtained by newsmen had revealed that Tinubu’s approval followed a proposal from the Federal Inland Revenue Service (FIRS) Chairman, Zacch Adedeji, which sought a 15 per cent import duty on the Cost, Insurance and Freight (CIF) value of imported petrol and diesel.

The proposal was addressed to the Attorney-General of the Federation, the Federal Inland Revenue Service, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), as part of a “market-responsive import tariff framework.”

According to the FIRS projections, the 15 per cent tariff would raise petrol landing cost by about ₦99.72 per litre, based on an average national consumption of 19.26 million litres daily as of September 2025.

This translates to an additional ₦1.92 billion daily in import costs and increased revenue to government coffers.

“At current CIF levels, this represents an increment of approximately ₦99.72 per litre,” the FIRS memo stated, “which nudges imported landed costs towards local cost recovery without choking supply or inflating consumer prices beyond sustainable thresholds.”

Even with the adjustment, the memo projected that Lagos pump prices would remain around ₦964.72 per litre ($0.62), below regional averages such as Senegal ($1.76), Côte d’Ivoire ($1.52), and Ghana ($1.37).

Tariff Not Revenue-Driven, But Corrective – Adedeji

In the government’s defence, FIRS boss Adedeji clarified that the policy was not designed to raise revenue but to correct market distortions.

“While domestic refining of petrol has begun to increase and diesel self-sufficiency has been achieved, price instability persists, partly due to the misalignment between local refiners and marketers,” Adedeji explained.

He warned that import parity pricing often fell below cost-recovery levels for local producers, making it difficult for domestic refiners to operate profitably.

“The government’s responsibility is twofold: to protect consumers and domestic producers from unfair pricing practices, while ensuring refiners can recover costs and attract investments,” he added.

Naijaonpoint understands that under Tinubu’s directive, the NMDPRA and the Nigeria Customs Service are to begin implementing the tariff after the 30-day transition period.

The NMDPRA is to issue new regulations, prioritise locally refined products in import licensing, and coordinate with the Implementation Committee on Crude and Refined Products Sales in Naira to determine future tariff adjustments.

Tinubu also ordered periodic reviews of the tariff, including possible “sunset clauses”, as local refining capacity expands.

“The core objective of this initiative is to operationalise crude transactions in local currency, strengthen local refining capacity, and ensure a stable, affordable supply of petroleum products across Nigeria,” the presidential approval letter stated.

The framework is anchored on Sections 21 and 22 of the Petroleum Industry Act (PIA), which empower the NMDPRA to impose public service obligations on licensees to enhance energy security.

Under Section 3(4), the President also holds the authority to issue directives to the regulator to ensure the policy’s enforcement.

The letter noted that payments from the tariff would go into a designated Federal Government revenue account managed by the FIRS, with oversight by the NMDPRA.

Nigeria Still Imports 69% of Fuel Needs

Naijaonpoint understands that despite the Dangote Refinery’s commencement of diesel and aviation fuel production, and modular refineries in Edo, Rivers, and Imo States refining small volumes of petrol, Nigeria still imports about 69 per cent of its national fuel demand as of October 2025.

The government hopes that by discouraging cheap imports, the new tariff will strengthen emerging domestic refineries and restore investor confidence in the downstream sector.

However, there is fear that without transparent regulation and sufficient local capacity, the 15 per cent import duty could raise petrol prices beyond ₦1,000 per litre and ignite public outrage.

Meanwhile, the NMDPRA spokesperson, George Ene-Ita, has assured of the full implementation of President Bola Tinubu’s newly approved 15 per cent fuel import tariff once it receives the formal directive from the government.

“We are the sector regulator, and once the policy comes into force, we will definitely play our regulatory role and midwife the process on behalf of the government,” the official told The PUNCH on Thursday, October 30.

“As of now, I’m not aware of any official communication, but if it is true that the policy has been signed by the President, it will eventually get to us, and there will be no issue implementing it.”

The spokesperson further explained that the downstream market remains fully deregulated, meaning that market forces and competition among operators would determine pump prices once the tariff takes effect.

“Since it is a presidential directive, the template is already there to follow through,” the spokesperson added.

“Prices may rise, stay the same, or even drop depending on competition and market realities. Personally, I don’t envisage any sharp increase because the government would have factored in stabilisation mechanisms to ensure that prices at the last mile don’t spiral out of control.”

However, energy analysts expressed caution, warning that while the policy could encourage patronage of local refineries and boost government revenue, it might also pose risks to energy security and retail prices.

An oil and gas expert, Olatide Jeremiah, told one of our correspondents that the new tariff would “inevitably add a mark-up of about N100 per litre to the landing cost of petrol and diesel,” potentially creating unfair price competition among suppliers.

“This move will drive demand towards local refineries and increase government income,” the expert noted.

“But it could also trigger price hikes and short-term energy insecurity, as even top energy-producing nations still import about 10 to 15 per cent of their fuel needs. Completely cutting off imports through high tariffs could expose the country to supply risks. The introduction of a 15 per cent tariff will add a mark-up of about N100 per litre to the landing cost of petrol and diesel, and it will give unfair price competition to the supply players.”