The Federal Government has suspended the planned 15 percent ad-valorem import duty on Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) — commonly known as petrol and diesel — following widespread concerns from oil marketers and industry stakeholders.
The decision was announced by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in a statement on Thursday, which also sought to reassure Nigerians that there is sufficient supply of petroleum products across the country despite rising demand during the current peak season.
“It should be noted that the implementation of the 15% ad-valorem import duty on imported Premium Motor Spirit and Diesel is no longer in view,” the NMDPRA said.
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Background to the Decision
In October, President Bola Tinubu approved the 15 percent ad-valorem duty on imported petrol and diesel, a move aimed at generating additional revenue and promoting local refining.
The approval, conveyed through a letter dated October 21, 2025, by Damilotun Aderemi, Private Secretary to the President, was directed to the Federal Inland Revenue Service (FIRS) and the NMDPRA for implementation.
However, the proposed levy sparked strong reactions from oil marketers, who warned it would lead to a sharp increase in pump prices and further strain consumers already grappling with high inflation and rising energy costs.
Marketers argued that the import duty would make it difficult for private importers to bridge supply gaps created by local refineries, which have yet to reach full production capacity.
Government Moves to Stabilize Supply
In its statement, the NMDPRA emphasized that both domestic refineries and importation channels are ensuring a steady flow of petroleum products — including PMS, AGO, and Liquefied Petroleum Gas (LPG) — to stabilize the market and prevent shortages.
“There is a robust domestic supply of petroleum products (AGO, PMS, LPG, etc.) sourced from both local refineries and importation to ensure timely replenishment of stocks and storage deposits at retail stations during this period,” the agency stated.
The regulator added that it is maintaining close surveillance on supply and distribution networks across the country to prevent any form of disruption or artificial scarcity.
NMDPRA also warned marketers and depot operators against hoarding, panic buying, or arbitrary price increases not justified by market forces, stressing that such actions could destabilize the downstream sector.
Dangote Refinery’s Position
Meanwhile, the Dangote Petroleum Refinery had earlier supported the government’s plan to impose the import duty, calling it a necessary protection for local producers.
The refinery said the measure would discourage dumping of imported fuel and strengthen local refining capacity, noting that it currently has the capacity to meet Nigeria’s demand.
According to company data, Dangote Refinery is loading around 45 million liters of petrol and 25 million liters of diesel daily, while working closely with regulatory agencies to ensure nationwide distribution.
The company has consistently argued that Nigeria’s long-term energy security depends on prioritizing domestic production over heavy reliance on imports, even as the government balances local industry protection with consumer affordability.
Broader Market Implications
The suspension of the duty is expected to ease immediate pressure on fuel prices and help stabilize supply in the short term. However, energy analysts say the government faces a delicate balancing act — supporting local refiners such as Dangote and modular refinery operators while avoiding policies that drive up import costs or fuel scarcity.
The NMDPRA’s assurance of product availability and its ongoing market surveillance are seen as critical steps to maintain public confidence and price stability in the coming weeks, especially as fuel demand typically peaks toward the end of the year.
The import ban was criticized by some economists, who noted that it contravened the PIA (Petroleum Industry Act) principle of free market, although many believed the move would ease FX pressure on the naira.