By Sola Adebawo
The Federal Government’s decision to implement a 15% ad valorem import duty on Premium Motor Spirit (petrol) and Automotive Gas Oil (diesel) represents a bold shift in Nigeria’s energy policy. Set to take effect from November 21, 2025, the policy—approved by President Bola Ahmed Tinubu—is designed to reduce the nation’s dependency on imported fuel and bolster domestic refining, particularly with the emergence of the Dangote Refinery.
Rooted in the Petroleum Industry Act (PIA) the policy reflects an industrial strategy aimed at giving local refiners a competitive edge. However, with the implementation date fast approaching, many Nigerians are raising a crucial concern: is the vision of energy self-sufficiency worth the immediate economic hardship it may cause?
The Economic Shockwave
The new 15% duty is expected to significantly raise the landing cost of petrol and diesel. Estimates from the Federal Inland Revenue Service (FIRS) suggest the tariff could add approximately ₦99.72to every litre of petrol.
In a market already strained by volatile foreign exchange rates, fuel marketers warn that the additional cost will inevitably be passed on to consumers—potentially driving pump prices beyond ₦1,000 per litre for the first time in Nigeria’s history.
This development would have a cascading impact across the economy. With transportation and logistics sectors heavily reliant on petrol and diesel, higher fuel prices would quickly translate into increased costs for goods and services, including food, building materials, and healthcare.
The inflationary pressure could be severe. For a country already battling high inflation, the introduction of this policy could exacerbate the ongoing cost-of-living crisis, making daily life more difficult for millions of Nigerians.
The Social Burden
Over 133 million Nigerians are currently classified as multidimensionally poor, and for many households, purchasing power has already been eroded by the removal of fuel subsidies and the sharp devaluation of the naira.
The introduction of the new tariff may feel like the final straw. For small-scale traders, the cost of transporting goods will increase. A tailor’s generator will consume more expensive fuel, and transport fares could double overnight for the average commuter. These seemingly small changes can quickly escalate into a wider social crisis, especially if people begin to feel abandoned in the economic transition.
To avoid unrest, the government will need to introduce visible and credible relief measures—including direct cash transfers, subsidised transport, and targeted support for vulnerable groups. Without these safeguards, the reform risks losing public support long before its intended benefits materialise.
The Political Calculus
The logic behind the new duty is clear: protect local refineries and conserve foreign exchange. It’s a strategic move aimed at signalling Nigeria’s commitment to energy self-reliance.
However, the timing and public perception are critical. If Nigerians view the policy as favouring corporate refinery interests over the welfare of citizens, political backlash could follow swiftly.
The policy’s success hinges on one key factor: how quickly domestic refineries—especially modular plants—can produce reliable and affordable fuel to close the supply gap left by reduced imports. Any delay or production shortfall could turn the reform into a political and economic flashpoint.
The Bottom Line
The 15% import duty is a bold declaration of intent. It seeks to correct decades of economic distortions and give local refineries room to thrive. But it also presents a delicate balancing act,
To succeed, the Federal Government must match industrial ambition with social empathy—cushioning the immediate pain for citizens while ensuring domestic refining meets national demand.
Without that balance, Nigeria risks trading energy sovereignty for deeper hardship, turning a visionary reform into a source of widespread discontent.
— Sola Adebawo is a business leader and communications expert. He is the General Manager, Government, JV & External Relations at Heritage Energy and a published author, scholar, and ordained minister.
