Adds detail throughout, including reactions from market participants London, 30 October (Argus) -- Nigeria's government has approved a 15pc import tariff on gasoline and diesel to strengthen energy security and protect local refining, according to a signed government letter seen by Argus . The tariff was proposed in a 10 October letter from the Federal Inland Revenue Service and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to President Bola Tinubu and was approved by him on 21 October. The letter describes the tariff as "not revenue driven but corrective", aimed at reinforcing national energy security, safeguarding local refining capacity, stabilising the downstream market and ensuring fair pricing. The tariff will apply to the cost, insurance and freight (cif) value at discharge, adding 99.72 naira/litre (7¢/l). Even with this adjustment, estimated Lagos pump prices would remain "in the range of N964.72/l (62¢), still significantly below regional averages", the letter said. Payments must be made into a designated federal revenue account and linked to NMDPRA discharge clearance, with cargoes released only after proof of payment. The tariff will raise costs for importers and influence regional trade flows, although Nigeria's reliance on gasoline imports has eased following the start of output from the 650,000 b/d Dangote refinery. Implementation begins immediately, with a 30-day transition period for cargoes already in transit. Dangote Group chairman Aliko Dangote announced plans to expand the conglomerate's 650,000 b/d refinery in Lagos into the world's largest at 1.4mn b/d on 26 October. Such an expansion was part of the original design of the refinery, but the company has "fast-tracked our decision to make this colossal investment" because of a new "Nigeria first" policy vision of President Tinubu that aims to reduce petroleum products import dependence, and save "billions in foreign exchange" that would otherwise be spent on product imports. Dangote -- who described flows of petroleum products into the west African region from the imported fuel trading hub of Lome, offshore Togo, as "dumping" -- challenged Nigerian coastal terminal owners' association Dappman to switch the import sourcing side of their businesses to domestic refining by taking Nigeria's troubled state-owned refineries private or investing in greenfield plants. A shipowner told Argus on the sidelines of the OTL Africa conference in Lagos that they ran the numbers on the 15pc tariff, and that a 20,000t cargo of gasoline from Lome, with product and freight costing about 16bn naira ($11mn) and insurance costing about N3mn would attract new additional costs of N2.4bn because of the tariff. Ship charterers would pass on the added cost to fuel consumers at the pump. "This policy is not to help local refining. It is an additional punishment for the end users of petroleum products", the shipowner said. Marine services company Kach Integrated Services managing director Victor Thomas told the OTL delegates that before the new tariff, Dangote's displacement of import volumes, which would otherwise have entered the domestic market first as coastal deliveries, through trucking from the refinery's gantry, was already cutting shipping activity in Nigerian waters, which the tariff would now further depress. This would reduce the revenues of Nigeria's port and maritime authorities, NPA and Nimasa, respectively, and the funds with which they are supposed to maintain maritime infrastructure and provide services, in turn. But a former director-general of Nimasa disputed the view that the Dangote refinery's operations were resulting in lower shipping activity and reduced government revenues. The NPA projected N1trillion revenue from 600 vessels calling at the Dangote refinery, but had seen 650 vessels in fact. Nevertheless, many fuel importers have already said the 15pc tariff would see them stop importation totally, the former maritime authority head said. The only producer of gasoline in Nigeria is the Dangote refinery. None of the operating modular refineries supply gasoline, so the direct beneficiary of the new tariff is plain to see. "Gasoline is the market", he said. Shipbroking firm Riverlake managing director Bello Tukur told Argus that he is an advocate for free trade. "It is very obvious that this tariff was introduced to protect the local refining industry", against the backdrop of the dispute between the Dangote refinery and importers, Tukur said. "The consumers are the ones going to suffer the effects of this", he said. By Erika Tsirikou, George Maher-Bonnett and Adebiyi Olusolape Send comments and request more information at [email protected] Copyright © 2025. Argus Media group . All rights reserved.