In a swift policy reversal aimed at shielding consumers from potential fuel price surges during the festive season, the Nigerian government has indefinitely suspended the planned 15% ad valorem import duty on premium motor spirit (PMS, commonly known as petrol) and automotive gas oil (AGO, or diesel).
The decision, announced by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), comes just weeks after President Bola Ahmed Tinubu approved the tariff and underscores the administration's responsiveness to public and industry concerns amid ongoing economic pressures.
The NMDPRA, the primary regulator for Nigeria's downstream petroleum sector, issued the update through its spokesperson, George Ene-Ita, emphasizing that the tariff's rollout is "no longer in view." This move is intended to maintain the affordability and availability of essential fuels, particularly as demand peaks in the run-up to year-end holidays. "There is an adequate supply of petroleum products across the nation, well within national sufficiency thresholds," the authority stated in its official release.
Sources from both domestic refineries and international imports are being leveraged to ensure depots and retail outlets remain fully stocked with PMS, AGO, liquefied petroleum gas (LPG), and other products.
To prevent market disruptions, the NMDPRA has issued a strong advisory against hoarding, panic purchasing, or unjustified price hikes by retailers. The regulator pledged ongoing vigilance, including regulatory interventions to safeguard distribution chains nationwide. "We appreciate the collaborative spirit of all stakeholders in the midstream and downstream sectors," the statement added, reaffirming the agency's dedication to energy security in Africa's most populous nation.
Background of 15% Import Tariff on Petrol and Diesel From Approval to Suspension
The now-suspended tariff was greenlit by President Tinubu on October 29, 2025, as part of broader efforts to bolster local refining capabilities and reduce Nigeria's heavy reliance on imported fuels. Applied to the cost, insurance, and freight (CIF) value of imports, the 15% levy was projected to add approximately N99.72 per liter to petrol prices, potentially exacerbating transportation costs, inflation, and household expenses in a country where fuel subsidies were fully removed in May 2023. Proponents argued it would level the playing field for domestic producers, particularly the landmark Dangote Refinery, by making foreign-sourced fuels less economically viable.
The Dangote Refinery, Africa's largest single-train facility with an initial capacity of 650,000 barrels per day (bpd), has been a cornerstone of Nigeria's push toward energy self-sufficiency. Located in Lekki, Lagos, the $19 billion project—championed by billionaire industrialist Aliko Dangote—began commercial operations in early 2025 and is already operating its gasoline unit at around 60% capacity. By the end of 2025, it aims to reach 550,000 bpd, with ambitious expansion plans to 1.4 million bpd by 2028.
Early impacts have been notable: Nigeria's petrol import bill dropped by 54% in the first quarter of 2025 alone, thanks to increased local output. The refinery's recent price adjustment—slashing ex-depot petrol rates from N950 to N890 per liter—has further stabilized wholesale markets, contributing to the current national pump price of about N875 per liter as of November 10.
Despite these gains, the tariff's introduction sparked widespread debate. Economists and industry leaders highlighted its potential to inflate living costs in an economy grappling with 34.7% headline inflation (as of October 2025) and a naira devaluation that has already driven up import-dependent goods.
Civil society groups, including the Petroleum Products Pricing Regulatory Agency Advocacy Coalition (PAACA), urged a suspension until local refineries could fully meet demand, warning of deepened hardships for low-income families reliant on affordable transport.
Stakeholder Reactions Relief Tempered by Long-Term Concerns
The suspension has elicited a spectrum of responses, blending immediate optimism with calls for sustainable reforms. Consumer advocates and transport unions have hailed it as a "bold decision" that could trigger a modest fuel price decline in the coming weeks, easing pressures on commuters and logistics firms. Energy analysts predict this could shave off 5-10% from retail margins, fostering greater market competition without compromising supply chains.
However, not all voices are celebratory. The Ogun Chamber of Commerce, Industry, Mines, and Agriculture (OGUNCCIMA) expressed disappointment, arguing that scrapping the tariff undermines investor confidence in the energy sector and delays the transition to full domestic refining. "This was a step toward industrialization; reversing it now risks stalling progress," said a chamber representative. Echoing earlier sentiments, some refinery stakeholders worry it may prolong Nigeria's $10 billion annual fuel import dependency, even as Dangote's output ramps up.
President Tinubu's administration, which has prioritized infrastructure and private-sector-led growth since taking office in 2023, faces a delicate balancing act. The policy U-turn aligns with its "renewed hope" agenda, which emphasizes protecting vulnerable populations while fostering industrial giants like Dangote. Yet, experts caution that without complementary measures—such as accelerated modular refinery projects and transparent pricing mechanisms—recurring import vulnerabilities could resurface.
As Nigeria navigates this pivotal moment, the NMDPRA's monitoring framework will be crucial. With global oil prices hovering around $75 per barrel and domestic production challenges persisting, the focus now shifts to ensuring equitable distribution and exploring incentives for green energy alternatives. For now, the suspension offers a breather, signaling the government's intent to prioritize stability over short-term fiscal gains in the world's sixth-largest oil producer.
This development is being closely watched by regional markets, where Nigeria's fuel dynamics often influence West African pricing trends. Updates on supply metrics and pricing will be tracked in the weeks ahead to gauge the policy's broader ripple effects.