BY BLAISE UDUNZE
When a nation is bleeding economically, with inflation at historic highs and residents gasping for survival, one expects authorities coverage to supply reduction, not suffocation. Yet, President Bola Ahmed Tinubu’s approval of a 15 per cent import obligation on petrol and diesel does the precise reverse for it taxing ache in a damaged financial system.
According to a presidential letter dated October 21, 2025, and addressed to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Tinubu directed the instant implementation of the brand new import tariff as a part of what the federal government described as a “market responsive import tariff framework.”
Signed by his Private Secretary, Damilotun Aderemi, the memo adopted a proposal by the Executive Chairman of the FIRS, Zacch Adedeji, who claimed the measure was a part of “ongoing reforms to boost local refining, ensure price stability, and strengthen the naira-based oil economy” in step with the so-called Renewed Hope Agenda.
In idea, it sounds noble with the purpose to guard native refineries, promote vitality safety, and construct a self-sustaining oil financial system. But in apply, this coverage is one other dagger within the coronary heart of Nigerians already crushed by the triple burden of gas inflation, forex collapse, and dwindling buying energy.
Because let’s face it, you can not tax your approach out of poverty when the individuals are already too poor to pay for survival.
The New Tariff: A Policy with Pain Written All Over It
Under the directive, importers will now pay a 15 per cent ad-valorem obligation on the fee, insurance coverage, and freight (CIF) worth of imported petrol and diesel. The authorities argues that this can “align import costs with domestic market realities” and “protect local producers from unfair pricing.”
But trade information reveal what this actually means at present CIF ranges, the brand new tariff will increase the touchdown value of petrol by about N99.72 per litre. In different phrases, the already painful pump value hovering round N920 per litre in lots of elements of Nigeria may simply surpass N1,000 per litre inside weeks.
This isn’t hypothesis, it’s arithmetic. Depot operators have already sounded the alarm.
“As it is, the price of fuel may go above N1,000 per litre. I don’t know why the government will be adding more to people’s suffering,” one operator lamented in an interview.
Another trade supply added, “Some of the importers are working in alignment with Dangote, which is why the last price increase was general. All players raised their prices at once. Without a clear framework to stabilise market forces, this import duty will worsen the hardship faced by consumers.”
So, whereas the federal government insists the obligation “won’t choke supply or inflate prices beyond sustainable thresholds,” market realities inform a unique story. The second you tax importation of important vitality merchandise in a rustic that hardly refines any petrol domestically, you’re successfully taxing the every day lives of tens of millions who rely upon that gas to maneuver, work, and eat.
An Economy Already in Free Fall
Nigeria’s financial system at this time stands on the brink. The naira has misplaced almost half its worth since mid-2023, driving annual inflation above 34 %, whereas meals inflation hovers at 40 %, in keeping with the National Bureau of Statistics (NBS). In one of many world’s largest oil producing nations, gas costs quintupled, rising greater than 514 % from N175 in May 2023 to N900, transportation prices have skyrocketed with the “agbuero” extortion compounding points, small companies are collapsing, and households are slicing meals to outlive.
When gas costs rise, every part else follows, from meals to transportation, hire, and the price of dwelling. The import obligation subsequently turns into a multiplier of distress, cascading by the financial system in methods the federal government both underestimates or intentionally ignores.
Manufacturers who rely upon diesel to energy their factories will cross the additional value to customers. Transporters will increase fares. Traders will hike costs. Schools, hospitals, and logistics firms will all alter their charges upward.
Within a number of months, the 15 % obligation will translate into one other spherical of inflationary spiral, deepening poverty and eroding the worth of wages even additional.
According to the National Bureau of Statistics, over 133 million Nigerians already live-in multidimensional poverty. While the World Bank’s 139 million estimate interprets to roughly six in 10 Nigerians dwelling under poverty line. This new tax may simply push tens of millions extra into deeper deprivation.
Protecting Local Refineries or Creating a Monopoly?
The authorities justifies this new tariff as a option to “protect local refineries.” But this clarification exposes the deeper structural hazard that Nigeria could also be strolling straight into a personal monopoly within the petroleum sector with Dangote Refinery as the final word winner.
While defending native trade is a respectable coverage purpose, doing so with out making certain honest competitors is {economic} suicide. The actuality at this time is that Dangote Refinery dominates the refining panorama each in measurement and political affect.
Most of the smaller modular refineries within the Niger Delta are struggling to begin manufacturing on account of lack of crude provide, excessive financing prices, and regulatory uncertainty. The authorities’s import obligation, subsequently, doesn’t create a stage enjoying subject; it merely tilts the market decisively in favour of Dangote.
If importers are taxed closely whereas one big refinery backed by political entry and incentives controls the availability chain, the result’s a monopoly, not a free market. And when one participant dominates gas manufacturing and pricing in a rustic of over 200 million individuals, the financial system is at his mercy.
Dangote may dictate wholesale costs, affect market provide, and quietly form authorities coverage, all beneath the banner of “local protection.” Already, entrepreneurs allege that the final spherical of value will increase was coordinated throughout the board, hinting at a shadow monopoly forming in plain sight.
This is harmful for any financial system, however for Nigeria the place corruption and patronage distort each coverage, it’s catastrophic.
Energy Security Built on Fragile Foundations
The FIRS memo to the President claimed that the brand new tariff goals to “strengthen local refining capacity and ensure affordable supply.” But native refining stays largely aspirational.
As of at this time, Nigeria nonetheless imports almost all its petrol, regardless of having 4 state owned refineries which can be perpetually moribund. The Dangote Refinery, though a technical marvel, remains to be struggling to realize full-scale petrol output and depends on imported crude for a lot of its operations.
The modular refineries, which had been alleged to fill the hole, are barely surviving. Without entry to crude oil feedstock usually monopolised by bigger operators, they can’t compete.
So, who precisely is being protected by this coverage?
Certainly not the small modular refineries in Edo, Bayelsa, or Rivers. Not the bizarre Nigerian who will now pay N1,000 for a litre of gas. Not even the struggling logistics sector, already crippled by excessive vitality prices.
The solely entity that advantages is a dominant non-public participant who can face up to the short-term shock after which revenue massively as soon as rivals are priced out.
Policy Contradictions and Economic Disconnect
The tragedy of this resolution lies not solely in its cruelty however in its confusion. The identical administration that preaches “ease of doing business” and “market freedom” is imposing tariffs that stifle competitors and harm customers.
When President Tinubu eliminated gas subsidy in May 2023, he promised that “subsidy is gone” and that market forces would drive honest pricing. But over a yr later, Nigerians have realized that what changed subsidy isn’t a free market however it’s a managed monopoly, backed by selective protectionism and opaque pricing.
The contradiction is stark. You can not take away subsidies on one hand after which impose punitive tariffs on the opposite. You can not preach deregulation whereas defending a single dominant participant.
This isn’t market reform; it’s {economic} confusion disguised as coverage innovation.
The Human Cost: Everyday Nigerians Paying the Price
For the bizarre Nigerians, the macroeconomics of import tariffs imply little. What issues is survival.
A household man who spends N2,000 every day on transport now faces N3,000. A small enterprise proprietor operating a diesel generator should now finances twice as a lot for energy. Food distributors, farmers, supply riders, all are trapped in a cycle of rising prices and shrinking incomes.
Each enhance in gas value is one other wound to the working class. And when authorities justifies it with lofty phrases like “energy security” and “local capacity protection,” it insults the intelligence of residents who know that their struggling funds elite consolation.
The common Nigerian now not trusts coverage bulletins as a result of they’ve realized that each “reform” means extra hardship.
Inflationary Tsunami Ahead
Economic specialists have already warned that this new import obligation may ignite a recent wave of inflation. Since transportation is a key value part in almost each sector, a 15 % enhance in gas import prices will ripple by your entire financial system.
Analysts at SBM Intelligence estimate that transport fares may rise by one other 25–30 %, whereas meals inflation may simply cross 45 % by early 2026 if the coverage isn’t reversed.
This isn’t mere hypothesis. We have been right here earlier than. After subsidy elimination in 2023, inflation jumped from 22 % to 34 % inside months. The distinction now could be that residents have exhausted their coping mechanisms.
When individuals can now not eat, they revolt. The Nigerian state dangers pushing its residents to that breaking level.
Killing Local Competition Before It is Born
Ironically, whereas the federal government claims to be “protecting local refining,” this coverage will possible kill smaller refineries earlier than they acquire traction.
Most modular refineries had been financed by non-public capital at excessive rates of interest. They want regular money circulation and aggressive margins to outlive. But when the federal government grants one mega-refinery privileged safety and imposes heavy duties on imports, it destroys the enterprise case for smaller gamers.
No investor will finance modular refineries if the regulatory surroundings favours one firm. And when competitors dies, innovation dies with it.
Nigeria may have constructed a diversified refining ecosystem, with a number of regional gamers supplying native markets and driving down prices. Instead, it’s making a single industrial empire whose affect will dwarf even that of the Nigerian National Petroleum Company (NNPC).
That isn’t industrial coverage. It is {economic} feudalism.
A Mirage of Regional Price Comparisons
The authorities argues that even with the brand new tariff, Nigeria’s pump costs would stay under regional averages: N964 per litre in comparison with Senegal’s $1.76, Côte d’Ivoire’s $1.52, and Ghana’s $1.37.
But this comparability is disingenuous. Those nations have steady energy grids, working public transportation, and higher social security nets. Nigerians don’t.
In a nation the place gas immediately powers houses, companies, and colleges on account of epileptic electrical energy provide, any enhance in gas value hits far more durable. Comparing Nigeria to Senegal or Ghana ignores the structural poverty and infrastructure decay that amplify each value shock.
It is like evaluating a person who walks barefoot to a different who drives a automobile and each are on the highway, however one feels each stone.
Taxing Misery within the Name of Reform
Policies like this expose the ethical blindness of governance in Nigeria. They deal with residents as {economic} statistics, not human beings.
The authorities sees gas as a fiscal downside to be taxed, not a lifeline that tens of millions rely upon. It assumes that elevating income justifies elevating struggling.
But no reform can succeed if it crushes the very individuals it’s meant to uplift.
Even from a fiscal standpoint, this obligation won’t ship the income the federal government expects. Higher pump costs will cut back demand, encourage smuggling, and gas black-market buying and selling. The end result will probably be much less income, extra inflation, and better corruption.
Policy Alternatives That Make Sense
If the purpose is really to strengthen native refining and vitality safety, there are higher, smarter paths to take.
– Provide entry to crude oil for modular refineries beneath clear, honest phrases.
– Offer tax incentives for native refiners, not punitive import tariffs that harm customers.
– Encourage competitors by regulatory fairness, not protectionism
– Invest in vitality infrastructure, together with pipelines, storage, and distribution to cut back logistics prices.
– Reform the ability sector in order that industries usually are not compelled to depend on diesel for survival.
Nigeria doesn’t want extra taxes; it wants clever insurance policies that steadiness safety with affordability.
The Politics of Pain
Let’s be clear, this 15 % obligation is as political as it’s {economic}. It serves highly effective enterprise pursuits cloaked in nationalist rhetoric.
Tinubu’s authorities has persistently framed hardship as “sacrifice” for a greater future. But when sacrifice turns into perpetual, it ceases to be patriotic, it turns into exploitation.
The political value of this resolution may very well be extreme. Nigerians who tolerated subsidy elimination with the promise of reform could not tolerate one other shock that pushes them into darkness.
Already, discontent is rising. Labour unions are getting ready for protests, civil society {groups} are calling for reversal, and the opposition is mobilising public anger.
If unchecked, this might turn out to be the defining disaster of the Tinubu presidency as an emblem of reform gone unsuitable.
The Road Not Taken
There was a chance to rebuild Nigeria’s vitality sector by inclusive, clear reforms. The authorities may have used the subsidy financial savings to repair refineries, help modular operators, and spend money on renewables.
Instead, it has chosen the straightforward route by taxing extra, explaining much less, and hoping for miracles.
But the legal guidelines of economics are unforgiving. You can not squeeze income from an financial system that’s shrinking. You can not construct vitality safety on insurance policies that destroy buying energy. You can not declare to guard the poor by enriching monopolies.
A Nation on the Crossroads
President Tinubu’s 15 % gas import obligation is not only a fiscal measure, it’s a ethical take a look at of governance.
It asks whether or not the Nigerian state nonetheless sees its individuals as residents or merely as customers to be taxed. Whether “Renewed Hope” means renewed hardship. Whether authorities coverage can nonetheless replicate empathy, not elitism.
As petrol edges past N1,000 per litre and diesel prices strangle companies, Nigerians are as soon as once more left to bear the implications of choices they didn’t make and can’t afford.
History will choose this administration not by its slogans, however by the way it dealt with the struggling of its individuals.
And if the story of this gas obligation turns into the story of one other failed reform of monopolies masquerading as markets, and residents sacrificed for revenue, then “Renewed Hope” will probably be remembered not as a promise, however as a warning.
Blaise, a journalist and PR skilled writes from Lagos, may be reached through: [email protected]
