The Federal Government plans a new tariff regime that could push petrol prices to about ₦1,163.75 per litre and generate ₦4.8 trillion annually from taxes on petrol and diesel.
The proposal introduces a 15% import duty and 7.5% VAT, effectively increasing fuel costs by 22.5%. Nigeria currently consumes around 62 million litres of petrol and diesel daily, meaning the tariff would add about ₦13.2 billion per day to consumers’ expenses.
Officials say the move is meant to protect local refineries, including Dangote and NNPC facilities, and ensure “energy security.” A leaked policy memo described it as a “measured import tariff” aimed at preventing duty-free imports from undercutting domestic producers.
However, analysts warn the timing could worsen inflation and deepen poverty. Prof. Wunmi Iledare, an energy economist, called it a “strategic inflection point” that offers long-term benefits but “short-term pain.” He cautioned that without safeguards, the policy could create monopolies and higher consumer costs.
Tax expert Olufemi Idowu noted that combining VAT and tariffs would raise transport and production costs, squeezing households and manufacturers. The Nigerian Economic Society (NES) also criticised the policy, arguing that with inflation already among the world’s highest, “the tariffs will only worsen living costs and deepen poverty.”
Industry operators fear the policy could enable profiteering, as local fuel remains costlier than imports. According to S&P Global, petrol in Lomé, Togo, sells for under ₦800 per litre, while the Dangote Refinery supplies the same product at about ₦820–₦840 per litre.
Despite the concerns, the government maintains that even with the new tariff, Nigeria’s pump prices—about ₦964 per litre ($0.62)—will remain below regional averages such as Senegal ($1.76) and Ghana ($1.37).
But experts argue that such comparisons ignore Nigeria’s low income levels and eroding purchasing power. They warn that unless infrastructure, logistics, and refinery efficiency improve, the new tariffs risk becoming another burden on Nigerians already facing high fuel, food, and transport costs.
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