The Impact of the Proposed 15% Import Duty on Petrol
The proposed 15% import duty on Premium Motor Spirit (PMS), commonly known as petrol, has sparked significant concern among various stakeholders in Nigeria. Festus Osifo, the President of the Trade Union Congress (TUC), has voiced his apprehensions about how this policy could exacerbate the already challenging living conditions for Nigerians.
During a recent appearance on Channels Television’s ‘TUC Half Hour,’ Osifo emphasized that the union is currently analyzing the policy and engaging with different stakeholders to fully grasp its implications. He pointed out that while the government claims the duty is aimed at protecting local refining capacity, the immediate effect might be a substantial rise in pump prices, especially since Nigeria still imports approximately 70% of its PMS needs.
Osifo questioned the rationale behind imposing a tax when local refineries are not producing enough to meet domestic demand. He highlighted that the Dangote Refinery operates within a free trade zone, which allows it to benefit from import duty waivers. Therefore, if the 15% duty applies to importers, they may pass the additional cost onto consumers, which he described as a reality.
The TUC leader called for transparency from the government regarding the scope and boundaries of the tax. He raised concerns about whether the duty would apply only to importers of petrol from abroad or also to those operating within Nigeria’s free trade zones. Without clear guidelines, he argued, the policy could lead to confusion and ultimately place a heavier burden on ordinary Nigerians at the pump.
Osifo stressed the importance of consulting labor and industry stakeholders before implementing such a decision. He stated that both the TUC of Nigeria and the Petroleum and Natural Gas Senior Staff Association of Nigeria would issue a “defined and informed” position after reviewing the policy’s details.
According to reports, the new tariff was approved by Tinubu and communicated in a letter dated October 21, 2025, to the Federal Inland Revenue Service and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, directing immediate enforcement. Official projections suggest that the 15% import duty could increase the landing cost of petrol by about ₦99.72 per litre, potentially pushing pump prices in Lagos to around ₦964.72 per litre, though still below regional averages.
The government’s intention behind the policy is to encourage the Dangote Refinery and modular plants in Edo, Rivers, and Imo states to boost production and reduce Nigeria’s reliance on fuel imports, which still account for roughly 67% of national demand. However, industry experts caution that without corresponding relief measures, the new duty could further strain households already struggling with the effects of fuel subsidy removal and inflation.
Key Concerns and Implications
- Economic Burden:The proposed import duty could significantly increase the cost of petrol, affecting everyday consumers.
- Impact on Local Refineries:While the policy aims to support local refining, the current state of local production may not be sufficient to meet demand.
- Free Trade Zones:The application of the duty to entities within free trade zones remains unclear, potentially creating confusion and additional costs.
- Consultation Needs:Stakeholders emphasize the need for thorough consultation before implementation to ensure clarity and fairness.
- Regional Comparisons:Despite the potential increase in pump prices, Nigeria’s rates may still remain below regional averages, but this could change with market fluctuations.
Conclusion
As the debate over the proposed 15% import duty on petrol continues, it is crucial for all parties involved to consider the broader implications on the economy and the general populace. The TUC’s call for clarity and consultation highlights the need for a balanced approach that addresses both economic goals and the well-being of citizens. The outcome of this policy will likely shape the future of fuel pricing and local production in Nigeria.