Nigeria  scraps planned 15% petrol and diesel  import duty amid price hike fears

By:ThinkBusiness Africa

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced on Thursday suspension of the planned implementation of a 15 per cent ad-valorem import duty on petrol (Premium Motor Spirit, PMS) and diesel (Automotive Gas Oil, AGO), following widespread concern that the new tariff would trigger a fresh round of fuel price increases and exacerbate the nation’s high inflation rate.

NMDPRA clarified that the implementation of the contentious duty is “no longer in view.” This decisive reversal comes just weeks after the policy, approved by President Bola Tinubu in October, was set to take effect.

“It should also be noted that the implementation of the 15% ad-valorem import duty on imported Premium Motor Spirit and Diesel is no longer in view.” NMDPRA statement read.

The primary objective of the now-shelved duty was to support the growth of local refining capacity, notably the 650,000-barrel-per-day Dangote Petroleum Refinery, by making imported petroleum products more expensive.

The government had argued the tariff would align import costs with domestic production realities and promote energy independence.

However, the policy was met with immediate backlash from stakeholders, including independent fuel marketers, who warned that the measure would restrict imports, reduce market competition, and potentially lead to a complete reliance on a single domestic source.

Crucially, the NMDPRA used the announcement to address growing fears of fuel scarcity, assuring the public of adequate supply across the country during the approaching peak demand period of the year-end holidays.

“The Nigerian Midstream and Downstream Petroleum Regulatory Authority wishes to assure the general public that there is an adequate supply of petroleum products in the country, within the acceptable national sufficiency threshold during this peak demand period,” NMDPRA said.

While consumer groups and marketers largely welcome the suspension for averting an immediate cost-of-living crisis, some industry groups, such as the Manufacturers Association of Nigeria (MAN), expressed disappointment, viewing the import duty as a necessary step to protect domestic investment and accelerate Nigeria’s journey toward energy self-sufficiency.

Economic analysts projected that the 15 per cent tariff, calculated at approximately N99.72 per litre of imported fuel, could have cost Nigerian consumers an estimated additional N973.6 billion (nearly N1 trillion) annually in increased fuel expenses.

This potential hike was viewed as a major threat to stability, given that the Consumer Price Index (CPI) for transportation has already soared to 126.20 points as of September 2025.

The increment could’ve pushed the estimated average retail pump price in Lagos into the range of N964.72 per litre, up from the current N860 price band. 

Currently, Nigeria’s national daily petrol consumption is estimated at 50 million litres. The Dangote Refinery recently announced a combined daily output of 70 million litres of petrol and diesel, signaling its potential to surpass domestic needs.