The initiative means that all imported fuel will now have a tax based on its value, which is intend­ed to make imported fuel more expensive to support Nigeria’s lo­cal refineries. This policy aims to encourage domestic production, create a fairer downstream sector, and reduce the country’s reliance on imported fuel.

In a letter dated October 21, 2025, reported publicly on October 30, 2025, and addressed to the Federal Inland Revenue Service and the Ni­gerian Midstream and Downstream Petroleum Regulatory Authority, Tinubu directed immediate implementation of the tariff as part of what the govern­ment described as a “mar­ket-responsive import tariff framework.”

The letter, signed by his Private Secretary, Damilotun Aderemi, conveyed the pres­ident’s approval following a proposal by the Executive Chairman of the FIRS, Zacch Adedeji.

The proposal sought the application of a 15 percent duty on the cost, insurance and freight value of import­ed petrol and diesel to align import costs with domestic market realities.

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.

“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,” Adedeji stated.

The FIRS boss also warned that the current misalign­ment between locally refined products and import parity pricing has created instabil­ity in the market.

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

He noted that import pari­ty pricing- the benchmark for determining pump prices, of­ten falls below cost recovery levels for local producers, particularly during foreign exchange and freight fluctu­ations, putting pressure on emerging domestic refiner­ies.

Adedeji added that the government’s responsibili­ty was now “twofold, to pro­tect consumers and domes­tic producers from unfair pricing practices and collu­sion, while ensuring a level playing field for refiners to recover costs and attract in­vestments.”

He argued that the new tariff framework would discourage duty-free fuel imports from undercutting domestic producers and fos­ter a fair and competitive downstream environment.

According to projections contained in the letter, the 15 percent import duty could increase the landing cost of petrol by an estimated N99.72 per litre.

“At current CIF levels, this represents an increment of approximately 99.72 per litre, which nudges imported land­ed costs toward local cost-re­covery without choking sup­ply or inflating consumer prices beyond sustainable thresholds. Even with this adjustment, estimated Lagos pump prices would remain in the range of N964.72 per litre ($0.62), still significantly be­low regional averages such as Senegal ($1.76 per litre), Cote d’Ivoire ($1.52 per litre), and Ghana ($1.37 per litre).”

The policy comes as Ni­geria intensifies efforts to reduce dependence on im­ported petroleum products and ramp up domestic re­fining.

The 650,000 barrels-per-day Dangote Refinery in La­gos has commenced diesel and aviation fuel production, while modular refineries in Edo, Rivers and Imo states have started small-scale pet­rol refining.

However, despite these gains, petrol imports still ac­count for up to 67 percent of national demand.