…Marketers warn of looming hardship, monopolistic concerns
…Govt says move will protect local refiners, ensure stability
Lagos, Nigeria – Petroleum marketers have raised the alarm that the pump price of Premium Motor Spirit, popularly known as petrol, could surge beyond N1,000 per litre following President Bola Tinubu’s approval of a 15 per cent ad valorem import tariff on fuel imports.
The new fiscal policy, detailed in a directive from the Presidency dated October 21, 2025, is designed to protect domestic refiners and create a level playing field for the nascent local refining industry. However, operators within the downstream sector have warned that the move could backfire, exacerbating the economic hardship faced by Nigerians and potentially leading to fuel scarcity.
The policy, which follows a proposal by the Chairman of the Federal Inland Revenue Service, Zacch Adedeji, is expected to take effect after a 30-day transition period. In a memo, Adedeji stated that the initiative aims to “operationalise crude transactions in local currency, strengthen local refining capacity, and ensure a stable, affordable supply of petroleum products across Nigeria.”
According to presidential projections, the tariff could increase the landing cost of petrol by approximately N99.72 per litre, potentially pushing the pump price in Lagos to around N964.72 per litre. The government argues this price remains below the regional average compared to neighbouring West African nations.
Marketers Sound Alarm Over Price Hike, Monopoly Fears
Despite the government’s assurances, depot operators and marketers have expressed deep concerns. In anonymous telephone interviews with The Guardian on Thursday, several operators stated that the real-world impact could be more severe than official estimates.
“As it is, the price of fuel may go above N1,000 per litre. I don’t know why the government will be adding more to people’s suffering,” one depot operator lamented.
Another operator pointed to potential market alignment among major players, stating, “Unfortunately, some of the importers are working in alignment with Dangote, which is why the last price increase was general; all players raised their prices at once.”
The National Vice-President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, acknowledged the policy had a dual impact. He stated that while the tariff could discourage importation and promote local refining, it also carries significant risks.
“The 15 per cent tariff on imported fuel has its own implications. Maybe the price will go up, and equally, it will discourage importers from bringing in fuel if it becomes too costly,” Fashola said.
He highlighted the pervasive concern within the sector that the policy could be perceived as “a way of monopolising the industry for certain people,” a clear reference to the Dangote Refinery and other local players.
Fashola also issued a critical caveat, stressing that the entire strategy is contingent on the ability of local refiners to meet domestic demand. “If the local refiners fail, it will have its own implications. It may lead to scarcity, and people will not have an alternative,” he added.
Government’s Rationale: Protecting Local Investment
The government’s position, as outlined in the presidential approval, is that the tariff is necessary to correct a market distortion. Adedeji’s memo noted that “import parity pricing often falls below cost recovery levels for domestic refiners,” threatening their viability.
The policy is framed as a measure to prevent duty-free fuel imports from undermining the significant investments in domestic refining, including the 650,000-barrels-per-day Dangote Refinery and several modular refineries.
However, with imported petrol still meeting an estimated 67 per cent of Nigeria’s consumption, the 30-day transition to this new tariff regime presents a significant test for the government’s balance between protecting local industries and shielding consumers from further price inflation. The coming weeks will determine whether the move stabilises the market or triggers the price surge and hardship that marketers predict.
