When a nation is bleeding economically, with inflation at historic highs and citizens gasping for survival, one expects government policy to offer relief, not suffocation. Yet, President Bola Ahmed Tinubu’s approval of a 15 per cent import duty on petrol and diesel does the exact opposite for it taxing pain in a broken economy.
According to a presidential letter dated October 21, 2025, and addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Tinubu directed the immediate implementation of the new import tariff as part of what the government described as a “market responsive import tariff framework.”
Signed by his Private Secretary, Damilotun Aderemi, the memo followed a proposal by the Executive Chairman of the FIRS, Zacch Adedeji, who claimed 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 so-called Renewed Hope Agenda.
In theory, it sounds noble with the aim to protect local refineries, promote energy security, and build a self-sustaining oil economy. But in practice, this policy is another dagger in the heart of Nigerians already crushed by the triple burden of fuel inflation, currency collapse, and dwindling purchasing power.
Because let’s face it, you cannot tax your way out of poverty when the people are already too poor to pay for survival.
The New Tariff: A Policy with Pain Written All Over It
Under the directive, importers will now pay a 15 per cent ad-valorem duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel. The government argues that this will “align import costs with domestic market realities” and “protect local producers from unfair pricing.”
But industry data reveal what this truly means at current CIF levels, the new tariff will raise the landing cost of petrol by about N99.72 per litre. In other words, the already painful pump price hovering around N920 per litre in many parts of Nigeria could easily surpass N1,000 per litre within weeks.
This isn’t speculation, it is arithmetic. Depot operators have already sounded the alarm.
“As it is, the price of fuel may go above N1,000 per litre. I don’t know why the government will be adding more to people’s suffering,” one operator lamented in an interview.
Another industry source added, “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. Without a clear framework to stabilise market forces, this import duty will worsen the hardship faced by consumers.”
So, while the government insists the duty “won’t choke supply or inflate prices beyond sustainable thresholds,” market realities tell a different story. The moment you tax importation of essential energy products in a country that barely refines any petrol domestically, you are effectively taxing the daily lives of millions who depend on that fuel to move, work, and eat.
An Economy Already in Free Fall
Nigeria’s economy today stands on the brink. The naira has lost nearly half its value since mid-2023, driving annual inflation above 34 percent, while food inflation hovers at 40 percent, according to the National Bureau of Statistics (NBS). In one of the world’s largest oil producing nations, fuel prices quintupled, increasing more than 514 percent from N175 in May 2023 to N900, transportation costs have skyrocketed with the “agbuero” extortion compounding issues, small businesses are collapsing, and households are cutting meals to survive.
When fuel prices rise, everything else follows, from food to transportation, rent, and the cost of living. The import duty therefore becomes a multiplier of misery, cascading through the economy in ways the government either underestimates or deliberately ignores.
Manufacturers who depend on diesel to power their factories will pass the extra cost to consumers. Transporters will raise fares. Traders will hike prices. Schools, hospitals, and logistics companies will all adjust their rates upward.
Within a few months, the 15 percent duty will translate into another round of inflationary spiral, deepening poverty and eroding the value of wages even further.
According to the National Bureau of Statistics, over 133 million Nigerians already live-in multidimensional poverty. While the World Bank’s 139 million estimate translates to roughly six in 10 Nigerians living below poverty line. This new tax could easily push millions more into deeper deprivation.
Protecting Local Refineries or Creating a Monopoly?
The government justifies this new tariff as a way to “protect local refineries.” But this explanation exposes the deeper structural danger that Nigeria may be walking straight into a private monopoly in the petroleum sector with Dangote Refinery as the ultimate winner.
While protecting local industry is a legitimate policy goal, doing so without ensuring fair competition is economic suicide. The reality today is that Dangote Refinery dominates the refining landscape both in size and political influence.
Most of the smaller modular refineries in the Niger Delta are struggling to start production due to lack of crude supply, high financing costs, and regulatory uncertainty. The government’s import duty, therefore, does not create a level playing field; it simply tilts the market decisively in favour of Dangote.
If importers are taxed heavily while one giant refinery backed by political access and incentives controls the supply chain, the result is a monopoly, not a free market. And when one player dominates fuel production and pricing in a country of over 200 million people, the economy is at his mercy.
Dangote could dictate wholesale prices, influence market supply, and quietly shape government policy, all under the banner of “local protection.” Already, marketers allege that the last round of price increases was coordinated across the board, hinting at a shadow monopoly forming in plain sight.
This is dangerous for any economy, but for Nigeria where corruption and patronage distort every policy, it is catastrophic.
Energy Security Built on Fragile Foundations
The FIRS memo to the President claimed that the new tariff aims to “strengthen local refining capacity and ensure affordable supply.” But local refining remains largely aspirational.
As of today, Nigeria still imports nearly all its petrol, despite having four state owned refineries that are perpetually moribund. The Dangote Refinery, although a technical marvel, is still struggling to achieve full-scale petrol output and relies on imported crude for much of its operations.
The modular refineries, which were supposed to fill the gap, are barely surviving. Without access to crude oil feedstock often monopolised by larger operators, they cannot compete.