November 12, 2025/CSL Report
Petroleum marketers in Nigeria may soon halt petrol importation following the Federal Government’s introduction of a 15 percent import duty on refined petroleum products and a recent price cut by the Dangote Petroleum Refinery. The refinery reduced its gantry price of Premium Motor Spirit (petrol) by ₦49 per litre from ₦877 to ₦828 making imported petrol increasingly uncompetitive.
Industry players note that this combination of lower local prices and higher import tariffs has reshaped market dynamics, positioning Dangote Refinery as the dominant supplier in the downstream sector. However, some marketers caution that a complete halt in imports could risk supply disruptions nationwide.
It is worth noting that the Dangote Refinery, which officially began operations last year, has faced significant challenges in gaining full traction in Nigeria’s downstream oil market. Despite its large-scale capacity, the refinery has struggled with competition from imported refined products, which oil marketers have previously claimed are considerably cheaper than sourcing directly from the refinery.
President Bola Tinubu approved the introduction of a 15% ad-valorem import duty on petrol and diesel imported into Nigeria. The new policy, which applies the duty to the cost, insurance, and freight (CIF) value of imported petroleum products, aims to promote the consumption of locally refined fuels and correct long-standing distortions in the downstream petroleum market. Previously, imported fuels were exempt from import duties, creating a significant pricing disparity between imported and locally produced products. The removal of this zero-duty advantage is expected to level the playing field, making domestic refining more competitive and sustainable.
The policy supports large-scale refineries such as the Dangote Refinery and various modular refineries across the country, which have struggled to compete with duty-free importers in recent years. By improving the viability of local refining, the measure is expected to attract fresh investment, create jobs, and reduce Nigeria’s dependence on imported fuel, in line with the government’s broader goals of energy security and self-sufficiency. For local producers, the import duty provides a much-needed boost to profitability and competitiveness, encouraging higher refining output and greater value addition within Nigeria. As domestic
operations expand, related industries such as transportation, logistics, engineering, and maintenance are also likely to benefit, contributing to wider economic growth.
However, we reiterate that there are potential drawbacks. The policy could lead to short-term fuel shortages if domestic refineries are unable to meet national demand consistently. It may also contribute to inflationary pressures, as higher fuel costs can raise transportation and production expenses across the economy. Furthermore, reduced competition from importers could concentrate market power among local refiners, increasing the risk of price manipulation or supply instability. The sudden policy shift may also disrupt existing import contracts and affect marketers’ financial stability, underscoring the need for a carefully managed transition to a fully domestically supplied fuel market.
Click here to download full report: CSL Nigeria Daily – 12 November 2025 – Oil refining.pdf
