President Tinubu’s New 15% Imported Petrol and Diesel Tariff: A Bold Step or a Monopoly Trap?

By George Omagbemi Sylvester | Published by saharaweeklyng.com

“A policy pitched as industrial protection and forex salvation; but does it protect Nigerians or consolidate a refinery monopoly?”

President Bola Tinubu’s recent approval of a 15 per cent ad-valorem import duty on refined petroleum products – petrol (PMS) and diesel (AGO) – was sold to Nigerians as tough, necessary medicine, protect domestic refining, preserve foreign exchange and reward a multi-billion-dollar private investment that finally began producing at scale. The logic is tidy in boardroom slide decks; raise the cost of cheap imports, make locally refined product price-competitive, nurture domestic industry and reduce the chronic hemorrhage of foreign exchange on refined fuels. Though policy is about consequences, not slogans. What the government calls protection risks becoming patronage; what it calls industrial policy could become the legal scaffolding for a monopoly.

The 15% duty was first approved and announced late October 2025 as part of a package of fiscal measures intended to shore up non-oil revenues and to secure the gains of the country’s nascent private refining capacity. The move came after the Dangote Petroleum Refinery (a $20 billion megaproject that began producing refined fuels in 2024) reached commercial throughput, prompting the government to incentivise local supply over imports. Proponents argue that the tariff would close the gap between imported product and locally refined output, prevent undercutting by underpriced foreign loads and protect what the government now frames as strategic industrial security.

On paper the argument has merit. Nigeria, paradoxically one of the world’s major crude oil producers, has for decades exported crude and imported refined products, a distortion that the Dangote refinery promised to end. Shielding nascent domestic refining from predatory pricing can be a legitimate industrial policy. Economies of scale take time; infant industries sometimes need temporary protection to survive; and the nation stands to gain from jobs, downstream activity and a retained share of the petroleum value chain. These are not fanciful claims, they are the underpinnings of industrial strategy everywhere.

The devil is in the detail and the distribution of beneficiaries. From the moment the policy was mooted, alarm bells rang among independent marketers, traders and many civil society groups. Their fear is simple and stark, a 15% import tariff applied in a market where one private refinery already produces a volume close to national demand risks removing competitors from the market, leaving one dominant supplier to set prices, ration supply and extract rents. In short: protection can calcify into monopoly. The concerns were not idle: within weeks of the tariff’s announcement traders warned that importers (many of whom supply the country’s internal distribution network and buffer the system in times of shortages) could be pushed out of the market, reducing supply diversity and increasing vulnerability to shortages and price shocks.

The Dangote Group and others publicly welcomed the policy, arguing it would stabilise supply and prevent substandard imports. Dangote’s spokesperson argued the tariff would not push up pump prices but would protect the industry and the economy. Yet a policy that appears to hand advantage to one private operator (even if unintentionally) invites suspicion. Critics pointed out that the refinery’s special economic arrangements (including Free Trade or EPZ-style privileges in some reporting) could leave independent importers bearing the full cost of the new duty while the privileged refinery remains insulated; a recipe for market capture.

And then the backlash swelled. Fuel marketers, unions, manufacturing bodies and some economists warned of immediate inflationary pass-through, higher transport costs and pressure on households already pushed to the brink by earlier economic reforms. Economist Gbolahan Olojede warned the duty could “reignite inflationary pressures” and cautioned against opaque implementation. Opinion pieces and industry briefs argued that a 15 per cent levy could add close to ₦95–₦100 per litre before storage, transport and margins, a reality with direct consequences for food prices, commuting costs and the competitiveness of Nigerian industry. These are not academic concerns in a country where a marginal uptick in fuel cost ripples quickly through the economy.

Faced with rising public unease and warnings from the trade and logistics end of the value chain (and with the peak holiday demand season approaching) the government stepped back. In mid-November 2025 the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced a halt/suspension of the planned tariff implementation, signalling a reversal of the deadline and committing to continued monitoring of supply to prevent disruption. That pause exposed the core political arithmetic, a policy that hits the pump in the short term is politically toxic, even if defensible in the abstract. The suspension also exposed the weak consultative process around the measure; a rushed political fiat had to be walked back after stakeholders made their costs plain.

So where does that leave us? First, industrial protection without clear, time-bound guardrails is dangerous. Tariffs and duties can be used for legitimate industrial nurturing – but only when accompanied by competition safeguards, transparent exemptions, clearly published beneficiary lists, and sunset clauses. Second, the policy exposes Nigeria’s policy-making pathologies: an over-reliance on headline fiscal fixes announced without rigorous stakeholder modelling and without mandated impact assessments. Third, the episode highlights a deeper governance question: when a single private actor commands such strategic weight in a sector, policy needs to be exquisitely careful not to create the impression (or the reality) of state policy tailored to a single firm’s advantage.

There is a third dimension: currency and balance-of-payments logic. Reducing fuel imports would save foreign exchange and strengthen the naira (a true national boon) but only if domestic refineries can reliably meet demand, maintain quality standards and supply at competitive prices. Short-run protection that drives up the pump price without commensurate increase in domestic output simply trades forex savings for inflation pain and social discontent. In that light, the responsible path would have been a staged approach: phased tariffs tied to verified increases in domestic refining output, mandatory wholesale price monitoring, strong anti-hoarding enforcement and legislative guardrails against anti-competitive behaviour.

If we are to be patriotic (if we genuinely want Dangote and any other domestic refiner to succeed) then success must be broad, lawful and visibly pro-competitive. Policy should reward production, not penalise competition. The state must ensure that any tariff is matched by clear rules: fixed windows for imports for small marketers, credit facilities to help domestic distribution adapt and legal anti-monopoly protections enforced by an empowered regulator. Without such mechanisms, the 15% duty risks becoming a short cut to concentrated market power and, eventually, to higher prices for ordinary Nigerians.

President Tinubu’s impulse to protect domestic refining is understandable and defensible in principle. But good intent does not substitute for prudent design. The recent suspension was a salutary reminder: economic management in Nigeria cannot be a monthly toggle between headline reform and crisis control. If this tariff is ever reintroduced, it must be transparent, time-bound, conditional on measurable domestic output increases, and paired with competition safeguards and social mitigation measures for low-income households.

In the end, Nigerians will judge policy by what they pay at the pump and whether they can feed their families. A tariff that secures refining jobs and strengthens the naira while keeping pumps stable would be a courageous, strategic win. A tariff that quietly abets market concentration and hands an overwhelming commercial advantage to a single refinery will be remembered as a policy that traded public interest for private gain. The difference between a bold step and a monopoly trap is not rhetorical (it is procedural, technical and enforceable. It is also, crucially, reversible) if we have the political will to put transparent guardrails in place before it is too late.