A recent development in Nigeria’s petroleum industry has sparked concerns about an impending fuel price hike. President Bola Tinubu approved a 15 % ad valorem import duty on automotive gas oil (diesel) and premium motor spirit (petrol). The decision was communicated in a letter dated 21 October 2025 to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The approval responded to a request from FIRS to apply the 15 % duty to the cost, insurance and freight (CIF) of imported fuel, aiming to align import costs with domestic realities.
As a result, the current cost of a litre of petrol and diesel is expected to rise by an estimated N99.72 kobo, pushing prices above N1,000 per litre at most filling stations that rely on imported fuel. Recent NMDPRA data show that total supply of premium motor spirit for August 2024 and October 2025 was 21.68 billion litres, of which only 31 % (6.67 billion litres) came from local refineries—including the Dangote Refinery—while 69 % was imported. This underscores Nigeria’s heavy reliance on imported fuel.
The land cost of imported fuel stood at N839.97 per litre on 21 October 2025, cheaper than the ex‑depot price of N877 per litre offered by the Dangote Refinery. The newly approved import duty may therefore give Dangote’s petrol a competitive advantage. In recent weeks, fuel prices have surged nationwide following increases in ex‑depot prices by Dangote and depot owners.
The approval of the import duty coincides with a FIRS directive requiring financial institutions to deduct a 10 % withholding tax on interest earned from short‑term securities. As the duty takes effect, Nigerians are likely to face higher fuel prices, which could have significant implications for the country’s economy and its citizens. Stakeholders and consumers will be watching closely as Nigeria navigates its energy landscape.
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