Nigeria shelves 15% fuel import tax seen as protecting Dangote Refinery

The Nigerian government has suspended the planned implementation of a 15% import duty on petrol and diesel, a policy widely seen as a major protection for the $20-billion Dangote Refinery, which has faced stiff resistance from entrenched fuel import interests.

“The implementation of the 15 per cent ad-valorem import duty on imported Premium Motor Spirit (petrol) and diesel is no longer in view,” the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said in a statement on Thursday.

The announcement, signed by George Ene-Ita, head of public affairs, and posted on the agency’s X handle, did not explain the reason for the reversal. President Bola Tinubu had only last month approved the new tariff, following a recommendation by Zacch Adedeji, chairman of the Federal Inland Revenue Service (FIRS).

The duty, which was to take effect in November, would have raised the cost of imported petrol by nearly ₦100 per litre, narrowing the price gap between foreign fuel and locally refined products. Officials said the measure was meant to “strengthen local refining capacity” and ensure that imported fuel did not undercut domestic producers such as Dangote Refinery.

Dangote had hailed the decision saying the country now produces enough petrol and diesel and there was no need for importation.

For decades, Nigeria’s powerful network of fuel importers has dominated the market, profiting from foreign supplies even as the country relied almost entirely on imported fuel.

But critics warned that the new tariff would drive up pump prices and deepen economic hardship for consumers already grappling with inflation. Energy experts also questioned the timing, noting that local refineries, including Dangote’s, were yet to meet full capacity.

It is unclear why the government abruptly shelved the plan, but analysts suggest pressure from market players, political considerations, or concerns over possible fuel shortages may have influenced the decision.

On Thursday, the NMDPRA assured that the country’s fuel reserves were adequate and within “acceptable national sufficiency levels,” urging marketers not to hoard products or raise prices.

“The Authority will continue to monitor the supply situation and take appropriate regulatory measures to prevent disruption,” it said.

For now, the reversal leaves the government walking a tightrope — between protecting local refining and keeping prices stable in an already strained economy.