BY YAKUBU AMAYINDI
President Bola Tinubu’s approval of a 15 per cent import duty on petrol and diesel has pushed a quiet technical debate straight into the lives of ordinary Nigerians. The policy is pitched as a shield for our fledgling local refineries and as a step to-ward energy security. Its price tag, however, is immediate and measurable. The Federal Inland Revenue Service (FIRS) projects the duty will add about N99.72 to the landing cost of a litre of petrol. That is a real figure that will benefit our na-tional reserve while also touching all Nigerians who are already living hand to mouth.
Arguments for and against the policy carry force on both ends. Supporters cite the scale of local investment in refining capacity and argue that imported fuel un-dermines domestic output and discourages further investment. The Dangote Re-finery, for example, has a processing capacity of 650,000 barrels per day and claims to hold more than 312 million litres of petrol in storage today. Its execu-tives insist the plant can meet domestic demand, supply diesel and aviation fuel, and still export nearly half its output. If that is true and if feedstock, logistics, and distribution are steady, protecting the domestic market for a season could help the industry stabilise and expand.
However, recent official numbers indicate that in June 2025, local refineries sup-plied only 30.79 per cent of the petrol consumed in the country, which we need to pay attention to before jumping on any bandwagon. The average daily petrol supply for the month was 49.277 million litres, with local refineries providing 15.172 million litres and imports making up 34.104 million litres. Overall, 67 per cent of the fuel we used that month was imported. Those are not small gaps to close overnight if we must be honest. The Central Bank of Nigeria (CBN) released $1.259 billion to oil sector players in the first quarter of 2025 to support imports. That means the market still relies heavily on foreign supply even as local capacity grows.
What follows from these realities is not a simple choice between shielding a new industry and protecting consumers. The tariff will change market incentives. Some economists welcome it as a measure for helping infant industries and be-coming a convenient revenue source. Yet, we need to ensure that if the tariff is genuinely meant to give domestic refineries breathing space to scale, then it must be temporary and conditional. When it becomes a permanent tax that merely fat-tens government coffers, ordinary Nigerians will bear the brunt while industry en-joys protected margins.
Marketers, depot owners, and importers see their businesses eroding, which is a valid point, as their businesses are about to collapse before their eyes. With this new development, some may delay shipments or redirect cargoes to neighbour-ing markets where arbitrage appears easier. This could result in temporary short-ages and higher pump prices before local supply fills the gap, leaving Nigerians to bear the burden.
For consumers, the pain is straightforward due to a potential increase in transpor-tation costs from Kano to Asaba and, by extension, the prices of food, goods, and services in Ojo market. Small traders, who often depend on generators and trucks, will feel that squeeze directly. Policymakers cannot ask households to ab-sorb this shock without visible and credible compensations.
Transparency will be central to public trust in this era. The government should publish the basis for the tariff, show the calculations that produced the N99.72 estimate, and report regularly on how it affects imports, local supply, and con-sumer prices. When the duty generates revenue, clearly indicate whether that money is used for Nigeria’s development. Without such public accounting, the policy will be read as revenue first and industry policy second.
The risk of market concentration must also be taken seriously. A tariff that pro-tects a single large player without safeguards invites political and economic back-lash. Competition rules must be enforced. Independent regulators should be em-powered to check pricing, trace product flows, and sanction hoarding or collu-sion. Where Dangote and other local refineries legitimately export product, regu-lators should ensure that exports do not undermine home supply during transi-tion periods.
There is a policy path that answers both the industrial and social questions. Let the tariff be time-bound and conditional, tied to clear milestones for local supply chain development. Utilise the fiscal space it creates to support logistics, enhance storage capacity, and improve distribution to underserved regions. Strengthen border controls and regional cooperation to limit smuggling. Most importantly, deploy targeted social measures to protect low-income households while the market adjusts.
The 15 per cent tariff should not be a test of ideology. It is a practical experiment in nudging a significant industrial change if properly implemented. Nigerians want domestic refining to succeed; however, it must be paired with protection, precise conditions, clear transparency, and rapid investments in the supply chain. Let’s avoid further burdening citizens and rather demonstrate how the short-term pain will yield long-term gain.
