Breaking! FG Halts Implementation Of 15% Import Duty On Petrol, Diesel

In late October 2025, the Federal Government under President Bola Tinubu approved a policy introducing a 15% ad-valorem import duty on imported Premium Motor Spirit (PMS), and Automotive Gas Oil (diesel).

• The duty would apply on the Cost, Insurance and Freight (CIF), value of imported fuel.

  
  
  
  
  

• The aims were to:

  • Protect and encourage domestic refining capacity (especially the Dangote Petroleum Refinery and modular refineries).

  • Align import costs with “domestic market realities” so that locally-refined fuel can compete.

• Projections suggested this duty could raise the landing cost of petrol by about ₦99.72 per litre.

However, on 13 November 2025, the NMDPRA announced that the implementation of the 15% duty is no longer in view — effectively suspending or abandoning the plan.

What the Suspension Means

• The NMDPRA’s statement confirmed that the duty will not be implemented at this time.

• They reassured the public of adequate supply of PMS, diesel and other petroleum products, emphasising that stock levels are within “national sufficiency threshold” despite peak-season demand.

• The regulator also warned against hoarding, panic buying and price gouging.

Why the Duty Was Proposed – And Why It’s Been Suspended

Why It Was Proposed

• Nigeria imports a large share of its fuel despite being a major oil producer; in 2025 the fuel-import bill remains substantial.

• The government wanted to stimulate domestic refining: if imports face a duty, locally-refined fuel becomes more attractive and imports less competitive.

• As per the earlier memo: the duty was part of a “market-responsive import tariff framework” aimed at strengthening Nigeria’s downstream sector.

Why It’s Suspended

The official statements do not detail all of the reasons for the suspension. But based on reporting and industry feedback:

• Many stakeholders warned that the duty could raise pump prices significantly, worsening inflation and transport costs, thereby increasing hardship.

• Concerns that domestic refining capacity is not yet sufficient to fill the gap that importers would vacate, meaning supply risk. For instance, although the Dangote Refinery is large, the market still depends heavily on imports.

• Given the timing (peak demand season, potential risk of disruption or panic), the regulator appears to have considered the policy’s short-term risks outweighing its long-term benefits.

Implications

For Consumers & Fuel Prices

• The suspension likely averts a sharp increase in petrol and diesel prices that could have followed the duty.

• Transport costs, logistics, and cost of living may thus avoid additional upward pressure in the immediate term.

• However, without the duty, the incentive to importers remains strong, which may slow the transition toward more domestic refining and self-sufficiency.

For Domestic Refining Industry

• The duty was designed to give domestic refining some breathing-space and competitive advantage. Its suspension may mean that domestic refiners have less protection from cheaper imports.

• The likes of Dangote Refinery may face continued competition from importers, meaning the goal of replacing imports with local supply may be delayed.

For Government Revenue & Policy

• The duty could have generated additional revenue (and reduced foreign exchange outflows from fuel imports), but with its suspension the expected revenue stream is delayed or lost.

• The decision signals that the government may proceed cautiously with import-tariff reform in the downstream petroleum sector, mindful of the trade-offs between industrial policy and consumer welfare.

For Markets & Importers

• Importers who had anticipated the duty may continue operations under current conditions — meaning market competition remains.

• Possible reassurance that supply disruptions or price shocks are being avoided may bolster market confidence.

What to Watch

• Refinery Utilisation and Output Growth: If domestic supply grows meaningfully, then revisiting the duty or a variant may become viable.

• Pump Price Trends: Will prices stay stable, rise due to other factors (exchange rates, global oil prices), or get relief from improved local supply?

• Import Volumes of PMS & Diesel: Will import levels decline as local refining capacity expands? Monitoring this will be key to assessing the long-term strategy.

• Policy Updates: Since the duty was “no longer in view” rather than formally cancelled, the government could reintroduce it in future (perhaps phased or modified).

• Inflation and Cost of Living: Fuel costs permeate many sectors (transport, goods). Any changes should be watched for ripple effects.

Conclusion

The suspension of the planned 15% import duty on petrol and diesel is a significant volte-face in Nigeria’s downstream petroleum policy.

On one hand, the government retains the long-term goal of boosting local refining and reducing import dependence. On the other hand, the immediate priority appears to have shifted toward maintaining supply stability and protecting consumers from potential price shocks.

Ultimately, the effectiveness of the policy environment will depend on whether Nigeria can rapidly ramp up domestic refining capacity and ensure distribution infrastructure keeps pace — only then can protective tariffs or duties be introduced without undue harm to consumers.