President Bola Tinubu has approved a 15% tax on imported refined fuels in a move aimed at protecting Nigeria’s struggling local refineries and bolstering national energy security. The policy, however, is expected to lead to an increase in retail fuel prices.
According to a document reviewed by Semafor and comments from senior government officials, the tariff will apply to refined petrol and diesel imported into Nigeria. The Federal Inland Revenue Service (FIRS), led by Zacc Adedeji, proposed the measure earlier this month.
Adedeji explained that the new tax seeks to ensure fair competition between local refiners and importers. “Local oil refineries are operating at cost levels that exceed those of fuel importers, which poses a threat to the refining sector,” he said.
However, the FIRS chief acknowledged that immediate implementation could have economic repercussions. “We are not implementing this tax now because we don’t want something that will lead to inflation by increasing the pump price,” Adedeji noted. A 30-day consultation period will precede the rollout, allowing stakeholders to provide feedback.
The government maintains that the tax is not designed to increase revenue or favor particular industry players. Instead, it forms part of a broader strategy to revive Nigeria’s dormant refineries and attract long-term investment.
Nigeria’s largest refinery, the 650,000-barrel-per-day Dangote Refinery in Lagos, has been at the center of the country’s energy reform discussions. The privately owned facility, operated by billionaire Aliko Dangote, currently supplies about 20 million liters of petrol daily and has advocated for reduced reliance on fuel imports.
In recent months, Dangote’s company has pushed for regulators to halt petrol import licenses, even filing a lawsuit against the state-owned Nigerian National Petroleum Company (NNPC). Another major refinery owned by Abdul Samad Rabiu’s BUA Group remains under construction.
The introduction of the new tax comes amid persistent economic pressures. Fuel prices in Nigeria have increased fivefold since 2023, following the government’s decision to end the costly fuel subsidy program that consumed around $10 billion annually. The move was intended to free up public finances but triggered widespread inflation.
Petrol price hikes have historically had a ripple effect on Nigeria’s economy, driving up transportation and food costs. While the inflation rate eased to 18% last month after six months of decline, analysts warn that renewed price pressures could reverse those gains.
Nigeria’s currency, the naira, has also experienced volatility against the dollar, further complicating import costs and household expenses. Economists argue that the success of Tinubu’s latest energy policy will depend on how quickly local refineries can scale up production to meet domestic demand.
As the 30-day consultation period progresses, Nigerians await clarity on how the government intends to balance refinery protection with consumer welfare in a nation already battling a cost-of-living crisis.
