By John Umeh
Nigeria’s fuel market has entered a fresh wave of uncertainty as petroleum marketers warn that the pump price of Premium Motor Spirit (PMS), popularly known as petrol, could surge past ₦1,000 per litre. This follows President Bola Ahmed Tinubu’s recent approval of a 15 percent ad valorem import tariff on fuel imports — a move that, though aimed at encouraging local refining, could drastically raise costs for consumers.
According to government sources, the policy takes effect after a 30-day transition period ending November 21, 2025. The tariff, which applies to both petrol and diesel, is part of a broader fiscal strategy to strengthen the local oil sector, stabilise the naira, and discourage excessive fuel importation.
However, depot operators and independent marketers have sounded the alarm, warning that the policy could have unintended consequences. Several industry stakeholders told reporters that the move might push retail prices above ₦1,000 per litre — a level that would deepen the country’s cost-of-living crisis and strain transport and manufacturing sectors.
“At the current exchange rate and logistics cost, prices will definitely rise,” said one Lagos-based depot operator who spoke under anonymity. “People are already struggling to buy at ₦920 per litre. Adding a 15 percent tariff now will only make things worse.”
Another operator suggested that the government’s timing was off, given that local refiners like Dangote are not yet able to meet the country’s full fuel demand. “If refineries can’t produce enough and we restrict imports through high tariffs, scarcity is inevitable,” the source warned.
Government’s Position
The Federal Inland Revenue Service (FIRS), which proposed the tariff, insists the move is part of long-term reforms to align fuel pricing with domestic production realities. In a memo to President Tinubu, the FIRS Chairman, Zacch Adedeji, said the policy is meant to strengthen local refining capacity while reducing the distortion caused by cheaper imported products.
According to official projections, the 15 percent import duty will increase the landing cost of petrol by about ₦99.72 per litre. Based on average consumption data, the new framework could add roughly ₦1.92 billion in daily import costs. Yet, the government maintains that even with the increase, pump prices in Nigeria will remain lower than those in neighbouring West African countries such as Ghana, Côte d’Ivoire, and Senegal.
“This measure will protect consumers and producers from unfair pricing while ensuring that refineries recover their costs,” Adedeji stated in the memo. “It is not a revenue-driven policy but a corrective step toward a sustainable downstream market.”
Marketers and Analysts React
Hammed Fashola, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), acknowledged that while the policy could encourage local refining, it also risks driving up prices if not properly managed.
“The government is trying to protect local refiners, which is commendable,” Fashola said. “But if refineries fail to supply adequately, scarcity and inflation will follow. It’s a double-edged sword.”
Fashola urged the government to expedite the rehabilitation of the Port Harcourt, Warri, and Kaduna refineries to prevent overreliance on a single producer. “Once multiple refineries like Dangote, BUA, and others are active, competition will bring stability,” he added.
Meanwhile, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) described the tariff as a “test policy.” Its President, Billy Gillis-Harry, said the key issue is maintaining both product availability and affordability. “Dangote alone cannot meet national demand,” he warned. “We must ensure imports are still viable until full domestic capacity is achieved.”
Public Outrage and Economic Concerns
The decision has sparked heated reactions across social media and among industry observers. Critics argue that the policy benefits large refiners at the expense of ordinary Nigerians.
Chief Ayiri Emami, a chieftain of the All Progressives Congress (APC) and an oil businessman, said the tariff would “worsen the suffering of the masses.” He urged President Tinubu to suspend the policy until economic conditions improve.
“Whoever advised the President to impose a 15 percent duty at this time doesn’t understand what Nigerians are going through,” Emami said. “This won’t hurt marketers; it will hurt the people.”
Social media users echoed similar sentiments. On X (formerly Twitter), one user wrote, “You can’t claim to deregulate the market and still restrict importers with tariffs. That’s not competition—it’s monopoly.” Another user argued that “fuel prices will rise again, and we’ll be told it’s for ‘stability.’ Meanwhile, the poor will bear the brunt.”
Outlook
Energy experts predict that the coming weeks will be turbulent as importers, refiners, and regulators adjust to the new policy. While the government insists the measure is temporary and will be reviewed periodically, its immediate effect is expected to be a sharp rise in pump prices nationwide.
Analysts warn that without adequate local production to fill the gap, the tariff could trigger another round of fuel scarcity, exacerbate inflation, and dampen economic recovery.
“The government’s goal to promote local refining is valid,” energy economist Olatide Jeremiah noted. “But the transition must be managed carefully. If not, this could backfire and worsen Nigeria’s already fragile energy market.”
For now, Nigerians brace for yet another increase in fuel prices — a reminder that the country’s long-promised energy reforms still come with painful trade-offs.
