Petrol Price May Rise to ₦1,163 as Tinubu’s New Tariff Targets ₦4.8 Trillion Revenue

Nigerians may soon pay as much as ₦1,163 per litre of petrol as the Federal Government introduces a new tariff policy aimed at generating ₦4.8 trillion annually from taxes on imported fuel. The plan, part of President Bola Ahmed Tinubu’s economic reforms, will impose a 15% import duty and 7.5% Value Added Tax (VAT) on petrol and diesel — a move that could drive up prices by over 22% and further strain households already struggling with high living costs.

The government insists the measure is not primarily for revenue generation but to protect local refineries such as the Dangote Refinery and revamped NNPC facilities. Officials argue that import parity pricing has weakened domestic refiners, making it difficult for them to compete with cheaper imported fuel. However, industry experts warn that the policy could fuel inflation, deepen poverty, and create profit-making loopholes for marketers.

According to a leaked policy memorandum, the tariffs are part of a “corrective” approach meant to strengthen local refining capacity and ensure national energy security. Yet analysts point out that locally refined fuel currently costs more than imported petrol. For instance, while imported petrol sells for around ₦800 per litre in Togo, the Dangote Refinery’s ex-depot price exceeds ₦820, raising concerns about efficiency and cost structure in Nigeria’s refining sector.

Economists like Prof. Wunmi Iledare described the policy as a “strategic inflection point” that could yield long-term gains but warned of immediate inflationary shocks. Tax expert Olufemi Idowu noted that combining import duties with VAT could push fuel prices up by nearly a quarter, leading to higher transport fares, production costs, and reduced consumer spending. Critics argue that, without strong safeguards, the policy could worsen inequality and hurt small businesses already battling rising operational expenses.

Meanwhile, industry stakeholders say the government should focus on fixing structural bottlenecks such as poor electricity supply, high logistics costs, and forex volatility, rather than shielding refineries through protectionist tariffs. They caution that Nigerians, facing one of the world’s highest inflation rates, cannot afford another price hike. As debates intensify, the new tariff plan underscores the government’s delicate balancing act between fiscal protectionism and public welfare in a fragile economy.

source: The Guardian