Nigeria approved a 15 percent import duty on petrol and diesel to push the market toward local refining and price stability. The policy is already pressuring pump prices toward, and in some cities above, ₦1,000 per litre. Logistics, inflation, and consumer sentiment are on the line. 

President Bola Tinubu approved a 15 percent ad valorem duty on imported petrol and diesel on October 21, 2025, directing FIRS and the midstream regulator to enforce it. Government projections indicate the duty could add roughly ₦100 to the landing cost of PMS. Officials frame the move as a way to protect domestic refiners, align prices with market realities, and reduce chronic import dependence. 

Independent reporting notes pump prices were already in the ₦900s in many locations through mid 2025, after the 2023 subsidy removal and subsequent market adjustments. Reuters reported Lagos at about ₦998 and Abuja at about ₦1,030 as far back as October 2024, while Premium Times observed NNPC retail adjustments to ₦915 to ₦945 in June 2025. The new duty is expected to push current prices higher, with analysts and marketers flagging the ₦1,000 threshold as increasingly common. 

Analysis

What most people miss is the policy sequencing. The duty is not a standalone price hike, it is a market-design tool to synchronize three moving parts, import parity, nascent local refining, and FX volatility. Without a duty, cheaper imports undercut local producers when global prices soften or the naira strengthens. With a duty, local plants like Dangote can plan output and financing more confidently, even if global arbitrage briefly favors imports. That increases the odds of steady domestic supply later, although it raises prices now. 

There is also a political economy angle. Abuja is betting that a contained, policy-driven nudge now is preferable to disorderly scarcity later. But the near-term hit lands squarely on transport, food distribution, and small businesses that cannot pass costs through quickly. If FX stays volatile or inland logistics remain tight, the duty can amplify retail price dispersion between coastal cities and the hinterland, widening inflation gaps across regions. 

Implications

• Inflation pulse: Transport and food inflation are likely to firm again as pump prices step up. The effect will be most visible in intercity haulage and urban ride costs within two to four weeks of full enforcement. 

• Refining incentives: The duty improves local refiners’ economics against imports, potentially accelerating run rates and medium-term supply security if crude feedstock and offtake contracts remain stable. 

• Policy trade-offs: If prices overshoot, pressure will mount for soft interventions, tax offsets elsewhere in the value chain, or temporary logistics relief to avoid a return to implicit subsidies that previously distorted the market. 

Takeaway

The real story is not today’s ₦1,000 pump price prints, it is whether this duty buys Nigeria a credible path to predictable, locally supplied fuel in 2026. If domestic refining scales and FX volatility eases, the shock can be front-loaded and brief. If not, consumers pay more now without the stability dividend later.