•Analysts warn of more difficult times
Nigerians are bracing for another round of economic hardship following President Bola Tinubu’s approval of a 15 per cent import duty on petrol and diesel, a move that analysts warned could push up prices at the pump by between N100 and N200 per liter and further deepen the inflation crisis already hitting households and businesses.
The new rate, according to The Cable, was announced in a letter dated October 21, 2025 and signed by Damilotun Aderemi, private secretary to the president, and will take effect 30 days after official notification. The policy aims to protect local refineries, particularly the Dangote refinery, and promote domestic fuel production. However, critics argued that the timing could not have been worse for an economy already reeling from rising prices, the depreciation of the naira and stagnant wages.
Under the new agreement, the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) will implement the tariff applied to the cost, insurance and freight (CIF) value of imported gasoline and diesel.
Izuchukwu Clement Igbanugo, founder of ACPAE Consulting Limited and former head of research at Financial Derivatives Company (FDC), criticized the government’s decision, describing it as “ill-timed and premature.”
“We have always failed in sequencing policies because of impatience,” Igbanugo said. “Why is Tinubu in a hurry? Why not wait for other refineries to come online before introducing this tax? Why not develop a modular refinery roadmap to support local producers first? This is like putting the cart before the horse.”
He stressed that Nigeria should first achieve self-sufficiency in fuel production before imposing restrictions on imports. “You cannot restrict imports before achieving sufficiency; first you achieve sufficiency and then impose restrictions. We must learn the art of policy sequencing: it is better to avoid a storm than to navigate through it,” he said.
Igbanugo warned that the tariff could raise pump prices to between N1,045 and N1,145 per litre, worsening the cost of living crisis. “Nigeria has the highest inflation rate among OPEC countries (more than 20 percent), almost ten times higher than countries such as the United Arab Emirates, Saudi Arabia, Algeria, Iraq and Kuwait,” he noted. “A 15 per cent petrol tariff will increase the pump price by between 100 and 200 naira and squeeze consumers even more.”
According to him, the current average price at the pump of N945 per liter is already weighing heavily on households. “Compared to per capita income, the burden borne by an average Nigerian family is ten times greater than that of an Algerian household and six times greater than that of a household in Angola,” he added.
Igbanugo warned that the new policy could encourage monopoly, increase inflation and deepen poverty. “Protectionism should come last and be strategic, not driven by the hunger for more money,” he said, adding that low energy access in Nigeria exacerbates the risk. “Energy consumption in Nigeria is only 136 kWh per person, compared to 5,000 in Malaysia and 3,400 in South Africa. About 92 million Nigerians (40 percent of the population) do not have electricity. They depend on fuel for their generators, and this policy will hurt small businesses the most.”
Akinjide Adeosun, Chairman and CEO of St. Racheal’s Pharmaceutical Nigeria Ltd, in an interview with Nigerian Tribune, argued that instead of taxing imports, the government should completely ban the importation of gasoline and focus on incentivizing local refining.
“We must ban the importation of petrol and ensure naira discounts on crude oil for local refining companies like Dangote,” Adeosun said. “The president must act because the price of gasoline drives inflation. A 20 percent discount on crude oil to local refiners or a ‘buy five barrels, get one free’ model could drive down prices.”
He also urged similar incentives for local manufacturers in sectors such as flour, cement and agriculture, to address rising costs. Adeosun further called for death sentences for economic saboteurs, comparing Nigeria’s situation to Singapore and China’s strict anti-corruption measures.
“The government should make life easier for grassroots people by building schools, hospitals and basic infrastructure,” he said.
The new fee followed a request by Zacch Adedeji, chief executive of FIRS, who defended the policy as “corrective, not revenue-driven”.
Adedeji said the move aims to “align import costs with domestic realities while preserving affordability.” He explained that payments will be made into a designated federal account and will be verified by NMDPRA before fuel importers receive authorization.
According to him, even with the new tariff, Lagos pump prices will be around 964.72 naira per liter ($0.62), still below regional averages such as Senegal ($1.76), Ivory Coast ($1.52) and Ghana ($1.37).
He added that the policy is supported by Sections 71 and 72 of the Petroleum Industry Act (PIA), which empower NMDPRA to impose public service obligations and recover costs through taxes. “Implementation will be transparent and digital. Customs and NMDPRA will update import templates and issue compliance notices to prevent speculation,” he said.
Despite official assurances, citizens and experts alike warn that the new tariff could trigger another wave of price increases across sectors, from transportation and food to electricity and rent.
“The impact of changes in energy prices on households will be severe,” Igbanugo reiterated. “Gasoline and diesel are the oxygen of economic and private life in Nigeria. This policy, although well-intentioned, can suffocate struggling families and small businesses.”
Public reactions on social media reflected this anxiety. On
Another user wrote: “Everyone is focused on next year’s income tax increase but ignoring the one policy that will worsen transport costs, food inflation and wipe out struggling SMEs: the 15 per cent fuel import tariff.”
As the 30-day countdown to the tariff’s implementation begins, Nigerians are bracing for another surge at the pump, a surge that could trigger another cycle of inflation and economic stress in Africa’s largest oil-producing nation.