President Bola Tinubu has green-lighted a 15 percent ad-valorem import duty on diesel and premium motor spirit (PMS), the fuel Nigerians simply call petrol. The directive, sealed in a letter dated October 21, 2025, was dispatched by Damilotun Aderemi, the President’s Private Secretary, to two key agencies: the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The move, which ties the duty to the full cost, insurance, and freight (CIF) value of imported fuel, is framed as a step to harmonize the price of imported petroleum products with the economic conditions inside the country.
The FIRS had pushed for this levy, arguing that without it, imported fuel enjoys an unfair edge over locally refined products. By slapping the 15 percent charge on the CIF benchmark—the total landed cost before local taxes and margins—the government hopes to level the playing field. In practice, the duty will push the pump price of petrol upward by roughly N99.72 per litre, according to industry estimates that have already begun circulating in Abuja and Lagos trading circles.
For a nation where petrol powers everything from commuter buses to standby generators in homes and offices, the ripple effects will be immediate and widespread. Transporters will pass on the hike to passengers; manufacturers will embed it in production costs; and the average trader in Onitsha or Kano will feel it in the price of tomatoes trucked in from the north. Inflation, already stubborn, is likely to get another shove. The Central Bank of Nigeria, still wrestling with a naira that has lost more than two-thirds of its value against the dollar since the 2023 float, now faces fresh pressure on the import bill for refined products.
Yet the announcement lands against a backdrop of guarded optimism in the energy sector. Hours after the duty was confirmed, the Nigerian National Petroleum Company Limited (NNPCL) revealed that it has kicked off a root-and-branch review of the country’s three moribund refineries—Port Harcourt, Warri, and Kaduna. The goal is unambiguous: bring at least one of them back to life before the end of 2026, with the others to follow in phased restarts. Engineers, financial auditors, and international technical partners have been mobilized, and the NNPCL says it will publish a roadmap within 60 days.
The refineries have been a national embarrassment for decades. Built in the 1970s and 1980s with a combined nameplate capacity of 445,000 barrels per day, they have limped along at less than 10 percent utilization for most of the past quarter-century. Turn-around maintenance contracts worth billions of dollars were awarded, executed, and—invariably—failed to deliver. Fuel subsidies, meanwhile, ballooned into a fiscal black hole, draining trillions of naira that could have fixed roads, hospitals, or schools. President Tinubu’s administration ended the subsidy regime in May 2023, a decision that sparked protests but also freed up funds many hoped would be channeled into infrastructure.
The new import duty can thus be read two ways. Critics see it as a stealth tax on an already burdened populace, a way to extract revenue without calling it a subsidy removal sequel. Supporters, including some economists in the Presidential Economic Advisory Council, argue that every naira collected will be ring-fenced for refinery rehabilitation and downstream modernization. The letter to FIRS and NMDPRA reportedly includes a clause mandating quarterly reports on duty collections and their direct application to capital projects in the midstream and downstream sectors.
Inside the NNPCL, the mood is one of cautious urgency. Sources within the corporation say the review teams are not starting from scratch. Modular mini-refineries licensed to private players—most notably the 650,000-bpd Dangote Refinery in Lekki—have already begun to chip away at Nigeria’s import dependence. Dangote Petroleum Refinery loaded its first cargo of petrol for the domestic market in September 2025, and its diesel has been blending seamlessly into the national pool since late 2024. Yet the state-owned refineries remain symbolic: if they can be revived, the psychological boost to local refining capacity would be immense.
Technical audits are focusing on three pain points. First, the crude supply distillation units (CDUs) in all three plants need new catalyst beds and piping replacements—corrosion has eaten through decades-old steel. Second, the fluid catalytic crackers (FCCs), which turn heavy gasoil into petrol, have obsolete control systems that cannot meet modern sulfur specifications. Third, power supply remains erratic; Warri and Kaduna refineries, in particular, sit in regions where the national grid delivers less than four hours of electricity daily. The NNPCL is in talks with Siemens and General Electric to install dedicated gas turbines at each site, funded partly by the new duty proceeds.
Finance is only half the battle. Labor unions, long suspicious of privatization whispers, have demanded iron-clad job guarantees. The Petroleum and Natural Gas Senior Staff Association (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) issued a joint statement welcoming the review but warning that any attempt to sideline Nigerian engineers would be resisted. Community leaders in the refinery host states—Rivers, Delta, and Kaduna—want a slice of the reconstruction contracts and a say in environmental remediation, given the oil spills and flare pits that scar the surrounding landscapes.
On the demand side, Nigeria consumes roughly 45 million litres of petrol daily, a figure that swells during elections or festive seasons. Diesel demand hovers between 12 and 15 million litres, dominated by trucks, industries, and telecom towers. With the 15 percent duty now in force, arbitrage opportunities between imported and locally refined products narrow, which is precisely the point. Dangote Refinery, exempted from the duty on its output, gains a competitive edge. Smaller depots and retail marketers, however, grumble that the N99.72 per litre increment will squeeze their already razor-thin margins unless ex-depot prices are adjusted downward—a decision that rests with the NMDPRA.
Market reactions have been swift. By midday October 22, 2025, the Nigerian Exchange saw shares in Conoil and TotalEnergies Marketing dip by 3.2 and 4.1 percent respectively, while Dangote Cement—tied to the same conglomerate—edged up 1.8 percent on refinery synergy hopes. Currency traders in Lagos pushed the parallel market rate to N1,735 per dollar, a 15-naira weakening in 24 hours, as importers scrambled for forex to cover higher CIF costs.
President Tinubu, speaking at a town hall in Owerri the day after the letter surfaced, framed the duty as a painful but necessary bridge to self-sufficiency. “We cannot keep spending $20 billion annually to import what we have under our feet,” he said, echoing a line he has used since the subsidy removal. He promised that within 18 months, at least 200,000 barrels per day of Nigerian crude would be refined domestically, cutting the import bill by 40 percent.
Whether that timeline holds will depend on execution. Past governments have issued similar deadlines; none met them. What is different now is the revenue stream the duty creates—projected at N2.1 trillion in the first full year if import volumes remain stable—and the political capital Tinubu has invested in the reform agenda. The letter to FIRS and NMDPRA is not merely administrative; it is a public commitment, copied to the National Assembly and the Office of the Accountant-General, ensuring transparency mechanisms that were absent in earlier rehabilitation fiascos.
For ordinary Nigerians, the calculus is simpler and harsher. A danfo driver in Lagos who filled his 60-litre tank at N898 per litre last week will now pay close to N1,000 starting next depot release. A textile factory in Kano running diesel generators will see its energy bill jump 12–15 percent. Yet if even one refinery roars back to life by late 2026, pumping 110,000 barrels of petrol daily as Warri once did in its prime, the long-term savings could outweigh the short-term pain.
The NNPCL’s review is structured in three phases: diagnostic (already underway), procurement and contractor selection (Q1 2026), and mechanical completion (Q4 2026). Each phase carries performance bonds and penalties for delays. International oil companies operating in Nigeria—Shell, ExxonMobil, Chevron—have been invited to second senior engineers to the technical committees, a nod to the expertise gap that has plagued previous efforts.
Environmentalists, meanwhile, are watching closely. The Environmental Rights Action group has called for soil and groundwater tests around the refineries before heavy construction begins, citing decades of unchecked effluent discharge. They want the duty revenue to fund not just steel and concrete but also flare elimination and wetland restoration.
As October gives way to November, the policy machinery is in motion. FIRS has issued implementation guidelines; NMDPRA is recalibrating price templates; NNPCL engineers are poring over blueprints yellowed by time. The 15 percent duty is now law, the N99.72 per litre increase a certainty, and the refinery review a national litmus test. For President Tinubu, the stakes are existential: deliver on domestic refining, and he cements a legacy of economic courage; fail, and the petrol queues of 2022 will return as a cautionary tale. For now, Nigerians brace, fill up, and wait—engines idling, wallets lighter, eyes fixed on the road ahead.
