FG Introduces 15% Fuel Import Duty as Dangote Refinery Drives Shift in Nigeria’s Energy Market

The average landing cost of imported petrol has fallen to N829.77 per litre, now cheaper than the ex-depot price of fuel produced locally, according to the Major Energies Marketers Association of Nigeria (MEMAN).

The MEMAN report, released on October 30, showed a steady decline in landing costs from N849.61 per litre on October 13 to N839.97 on October 21, before settling at N829.77. However, Dangote Refinery’s gantry price remained higher at N877 per litre as of last Thursday.

In contrast, data from Petroleumprice.ng on Sunday showed that Dangote’s ex-depot price averaged N873, while other major marketers priced between N871 and N890 per litre. Despite these differences, pump prices in Lagos and Ogun States hovered around N920 per litre.

The Federal Government has now introduced a 15 per cent import tariff on petrol and diesel — a move the Presidency described as a strategic effort to encourage local refining and strengthen energy independence under the Renewed Hope Agenda.

In a statement on X (formerly Twitter), Sunday Dare, Special Adviser to the President on Media and Public Communications, said the policy was “a bridge, not a burden,” designed to reposition Nigeria’s petroleum sector and ensure long-term economic stability.

“For years, Nigeria relied on imported fuel despite being a major crude oil producer. This policy aims to reverse that dependence by incentivising local refining, conserving foreign exchange, and ensuring that our oil wealth translates directly into national prosperity,” Dare said.

He added that the import duty would make imported petrol less competitive while giving an edge to locally refined products from the Dangote Refinery, Port Harcourt Refinery, and other emerging modular plants. The new tariff will take effect after a 30-day transition period, ending on November 21, 2025.

Business leaders, including Aliko Dangote, have long complained about the impact of subsidised imported fuel — particularly cheap Russian petrol entering through Togo — which forced local refiners to sell below cost. The new policy is expected to level the playing field for domestic producers.

However, concerns persist over the possibility of fuel scarcity if local refiners fail to meet national demand. The President of PETROAN, Billy Gillis-Harry, warned that poor implementation could cripple fuel importation, eliminate competition, and create a monopoly in the downstream sector.

“While the tariff supports local refining and energy security, regulators must ensure fair competition. The NMDPRA must remain vigilant against market dominance,” he said, urging the NNPCL to supply sufficient crude oil to domestic refiners.

Amid these developments, Dangote Refinery assured Nigerians of steady fuel supply during the festive period, while the NNPCL reduced its pump price by N10, from N955 to N945 per litre, citing improved supply from the refinery. Nonetheless, retail prices still vary across NNPCL stations in Lagos, ranging between N920 and N928 per litre.

Meanwhile, Oando Plc has suspended petrol importation as domestic supply from Dangote disrupts the downstream market. The company reported a 20 per cent decline in trading revenue in the first nine months of 2025, attributing it to reduced PMS imports amid growing local refining capacity.

Oando’s report showed a 20 per cent year-on-year revenue decline to N2.5tn, down from N3.2tn in 2024, and a 42 per cent drop in gross profit to N113bn. However, profit after tax surged by 164 per cent to N210bn, driven by stronger upstream performance and legacy recoveries.

The company said it deliberately paused PMS trading to adapt to “a structural shift in Nigeria’s fuel market,” redirecting focus to crude oil, LNG, and metals trading.

“With the Dangote refinery now fulfilling its role in meeting national demand, we are prioritising higher-margin crude and gas trading while monitoring opportunities for re-entry into refined products,” Oando stated.

The 650,000 barrels-per-day Dangote Refinery, which began production in 2024, has rapidly become a dominant force in Nigeria’s energy sector — drastically reducing fuel imports, stabilising supply, and reshaping the country’s downstream market dynamics.