FG’s New Fuel Tax May Push Petrol Price to ₦1,163 — Here’s What It Means

Petrol Price May Soar to N1,163 as Federal Government Targets N4.8 Trillion from New Fuel Tariff

Nigeria may be heading for another round of fuel price hikes as the Federal Government considers introducing new import duties and value-added taxes on petrol and diesel. The proposed tariff structure, if implemented, could push the current average pump price from around N950 to as high as N1,163 per litre — a rise of more than 22 per cent.
According to reliable government sources, the move is part of a wider economic policy expected to generate roughly N4.8 trillion annually through taxes on imported fuel. The fresh tariff will apply a 15 per cent import duty and a 7.5 per cent VAT on every litre of petrol and diesel brought into the country.
While the government argues that the plan is meant to protect local refineries like Dangote Refinery and the newly revived NNPC plants, many Nigerians are worried that the decision will only worsen the already unbearable cost of living. Economists and industry analysts have described the policy as a double-edged sword that could promote local refining in the long term but trigger inflation and deeper poverty in the short term.
Energy analysts warn that the government’s focus on “protectionism” may backfire if refinery output remains low and market forces continue to favour cheaper imported products. Data from global energy analysts show that petrol sold in nearby West African markets such as Togo and Ghana is often cheaper than locally refined fuel from Nigeria, despite the shorter logistics chain.
This reality raises concerns that new tariffs could allow marketers and refiners to exploit consumers through price manipulation and weak regulatory oversight. With inflation already above 30 per cent and wages stagnant, a jump in fuel prices could directly affect transport fares, manufacturing costs, and food prices nationwide.
Financial experts have also questioned the timing of the policy. Many believe it could further destabilize the economy, especially when most Nigerians are still struggling to recover from the removal of fuel subsidy and rising foreign exchange rates. “Any additional tax on petrol at this point will feed directly into the inflation cycle,” said one economic analyst. “Households will spend more on transportation, production costs will rise, and businesses will face new operational challenges.”
The government, however, insists that the move is not revenue-driven but aimed at stabilizing the downstream sector. Officials claim that imposing a tariff on imported fuel will discourage dependency on foreign products, allowing domestic refiners to thrive. The new revenue is expected to be managed by the Federal Inland Revenue Service (FIRS) in collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Despite these assurances, public confidence remains low. Nigerians recall that similar policies in the past — introduced under the guise of promoting self-sufficiency — often ended up enriching a few private operators while worsening poverty levels. Industry experts are calling for a balanced approach that promotes competition, efficiency, and consumer protection rather than outright import restrictions.
Some stakeholders argue that instead of shielding refineries with tariffs, the government should focus on solving key structural challenges like poor power supply, high transport costs, and inefficient port operations that make local refining expensive. If these issues are resolved, they say, local refineries will naturally become more competitive without heavy-handed protectionism.
For now, the fear among Nigerians is real. With a possible N213 increase on every litre of petrol, daily expenses could spiral out of control. Transport fares may surge, food prices could climb higher, and manufacturing costs might rise further — pushing millions deeper into hardship.
While supporters of the policy say it could eventually lead to energy stability and a stronger naira-based economy, most analysts agree that unless the government introduces effective cushioning measures, the short-term effects could be devastating for households and businesses alike.