Petrol Price May Soar to ₦1,163/Litre as FG Proposes New Tariff Regime
• Stakeholders kick, warn of inflation, deeper poverty
ABUJA — The pump price of Premium Motor Spirit (PMS), popularly known as petrol, may rise to about ₦1,163.75 per litre as the Federal Government considers a new tariff regime that could impose an estimated ₦4.8 trillion yearly in fresh taxes on petrol and diesel.
The proposal, which is currently under review, introduces a 15 per cent import duty and 7.5 per cent Value Added Tax (VAT) on imported petroleum products. Analysts say the combined 22.5 per cent tariff increase could further worsen the cost-of-living crisis already gripping Nigerians following the removal of fuel subsidy in 2023.
If approved, the 15 per cent duty will be implemented in addition to an existing five per cent surcharge on refined petroleum products, as contained in the Nigeria Tax Administration Act, expected to take effect from 2026.
Economic experts warn that the new tax structure will have far-reaching implications on transportation, food prices, and industrial production, likely triggering another round of inflation across the country.
Energy economist, Dr. Jide Akintola, described the move as “ill-timed and insensitive,” noting that Nigerians are still struggling with the economic fallout of subsidy removal and naira depreciation.
“The government should be looking at relief measures, not additional taxes. Increasing fuel prices now will only deepen poverty and push small businesses to the brink,” Akintola said.
Stakeholders in the manufacturing and transport sectors have also voiced strong opposition to the proposal, warning that the policy could lead to widespread job losses and a further decline in industrial productivity.
The government, however, insists that the proposed tariff adjustment is aimed at boosting revenue generation and aligning Nigeria’s fuel pricing system with global trade standards.
Despite the rationale, the development has sparked fears of renewed public outcry similar to the one that followed the subsidy removal last year, when petrol prices jumped from ₦185 to over ₦600 per litre before stabilising around ₦950.
As discussions continue, many Nigerians are anxiously watching whether the Federal Government will proceed with the proposal — a decision that could once again redefine the nation’s economic landscape.