President Bola Tinubu has approved a 15 percent ad-valorem import duty on diesel and premium motor spirit (PMS), also known as petrol, a move expected to reshape Nigeria’s downstream sector and impact the cost structure of businesses, particularly micro, small, and medium enterprises (MSMEs).
The development was announced in a letter dated October 21, 2025, in which Damilotun Aderemi, Private Secretary to the President, conveyed Tinubu’s approval to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
According to the letter, the 15% duty will be applied on the Cost, Insurance, and Freight (CIF) value of imported fuel to align with current market realities. With this approval, experts project that the new tariff could increase the pump price of petrol by about ₦99.72 per litre, a change that may significantly affect the cost of production and logistics for MSMEs across the country.
Refineries Review
In response to the tariff policy, the Nigerian National Petroleum Company Limited (NNPCL) has announced a comprehensive review of Nigeria’s three state-owned refineries, signalling renewed efforts to boost local refining capacity and reduce dependence on imported fuel.
Bayo Ojulari, the Group Chief Executive Officer (GCEO) of NNPCL, disclosed via his official X handle that the company is exploring technical equity partnerships to “high-grade or repurpose” the refineries for improved performance.
“The NNPCL remains optimistic that the refineries will operate efficiently, despite current setbacks,” Ojulari said in a post tagged ‘Update on Our Refineries’.
The NNPCL’s review could open new business and supply chain opportunities for MSMEs in areas such as refinery maintenance, local logistics, equipment servicing, and support services, sectors that could benefit from the government’s push for domestic refining.
Background and Current Realities
Nigeria has spent an estimated $3 billion on refinery rehabilitation projects over the years. However, only a portion of the Port Harcourt refinery, about 60,000 barrels per day, operated briefly before shutting down again. The Warri refinery has also struggled to sustain output, while the Kaduna refinery has remained idle.
With the new tariff and potential revival of local refineries, experts say Nigeria’s MSMEs, especially in manufacturing, agriculture, transportation, and power generation, will need to adapt to rising energy costs while leveraging emerging opportunities in local fuel distribution and value-chain services.
