Anxiety Grows As Petrol Depot Price Nears ₦900/Litre, New Fuel Tax Looms

By NINI NDUONOFIT-AKOH

TENSION is quietly building across Nigeria as the depot price of Premium Motor Spirit (PMS), popularly known as petrol, climbed to ₦889 per litre this week — a fresh record that has left consumers and marketers uneasy ahead of the government’s planned 15 percent fuel tax.

According to depot data obtained yesterday, Matrix Energy recorded the highest sale price at ₦889 per litre, while Aiteo offered the lowest at ₦871. Other major suppliers such as Dangote Petroleum Refinery, Eterna, AA Rano, and AYM Ashafa sold at ₦877, ₦874, ₦871, and ₦885 per litre respectively.

With the introduction of the new tax slated for late November after a 30-day transition period, operators in the downstream sector warn that petrol prices could soon surpass ₦1,000 per litre, intensifying pressure on households and businesses already grappling with inflation and rising transport costs.

Tax Sparks Mixed Reactions

The new import duty, approved by President Bola Tinubu, will apply to both petrol and diesel at a 15 percent ad-valorem rate based on the cost, insurance, and freight (CIF) value at discharge. The government says the measure is not revenue-driven but designed to stabilise the energy market, encourage local refining, and protect emerging domestic refineries from unfair import competition.

“The government’s responsibility is twofold,” a policy statement explained. “To protect consumers and domestic producers from unfair pricing and to ensure a level playing field that attracts continued investment.”

The proceeds of the tax will be paid into a designated Federal Government revenue account under the supervision of the Nigeria Revenue Service (NRS) and verified by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) before clearance.

Implementation will begin on November 21, 2025, after a grace period to allow importers to adjust cargoes already en route.

Marketers Urge Careful Rollout

Despite widespread concern over potential pump price hikes, the Petroleum Retail Outlets Owners Association of Nigeria (PETROAN) says it supports the government’s long-term vision, provided implementation is managed responsibly.

“This is a new measure that has never been tried before,” said Dr. Billy Gillis-Harry, PETROAN’s National President. “From all indications, the government has good intentions, and our association will work with others to ensure it is implemented in a way that does not cripple businesses.”

Industry players agree that the tax could help correct distortions in the petroleum supply chain — particularly the pricing gap between locally refined and imported products — but warn that it could also trigger a ripple effect on transport fares, food prices, and consumer spending if not carefully phased in.

Local Refining vs. Market Reality

While local refining of petrol has begun to increase — led by the Dangote Refinery and smaller modular plants — the market still depends heavily on imports. Government officials argue that aligning fuel pricing with domestic cost structures is essential to sustain local production and attract further investment.

“Import parity remains the benchmark for pricing,” the government statement noted, “but it often sits below the cost recovery point of local producers, especially during currency fluctuations. Left unchecked, this undermines our nascent refining sector at the point of recovery.”

The administration has also directed the NMDPRA and the Nigeria Customs Service (NCS) to consider domestic production first when granting import licences and to review the tax rate periodically as local refining capacity expands.

Public Anxiety Mounts

For ordinary Nigerians, the announcements have sparked unease. Many fear that depot and retail price increases will translate into another round of inflationary shocks, with transporters and businesses passing on higher costs to consumers.

With petrol prices already nearing ₦900 per litre — and projections that it could cross the ₦1,000 mark once the new tax kicks in — analysts warn of tougher months ahead unless government intervenes to cushion the impact.

For now, Nigerians can only wait, watch, and worry — as the delicate balance between energy reform and affordability hangs in the balance.