A recent policy brief released by the Centre for the Promotion of Private Enterprise (CPPE) has strongly cautioned that the Federal Government’s suspension of the 15% import duty on petrol and diesel poses a significant and immediate threat to Nigeria’s long-term energy independence, economic stability, and industrialisation agenda.
The brief signed by the Chief Executive Office, Dr Muda Yusuf, emphasised that while the suspension may address immediate consumer concerns, it fundamentally undermines the nation’s commitment to achieving self-sufficiency in petroleum products, a strategic national priority.
The 15% import duty was originally instituted as a crucial industrial protection instrument. Its purpose was clear: to create a level playing field, encourage backward integration, and protect multi-billion-dollar investments made by emerging private refiners, including the Dangote Refinery and modular refinery operators.
These investors made massive commitments based on the assurance of a policy environment that rewarded local production. The suspension now exposes domestic refiners to inequitable competition from foreign importers who benefit from vastly superior international logistics and cost structures.
Local refiners contend with endemic Nigerian challenges, including:
- High costs of energy and self-generation.
- Severe infrastructure gaps and logistics bottlenecks.
- Security risks and elevated capital costs.
Without the protective duty, the brief warns that achieving cost parity with imported products is impossible, risking the viability of these transformative national assets.
Macroeconomic Instability and Job Loss
Beyond the direct threat to refining businesses, the policy reversal carries severe macroeconomic consequences. Petroleum importation remains one of Nigeria’s largest consumers of foreign exchange (FX). Increased imports, following the duty suspension, will heighten pressure on the Naira, fuel inflation through exchange-rate pass-through, and deepen the nation’s balance-of-payments deficits.
Furthermore, unrestrained importation effectively exports Nigerian jobs. Domestic refining stimulates broad value-chain activities—from petrochemicals and plastics to engineering services and logistics. Abandoning the protective duty risks the loss of thousands of projected jobs and stifles the development of essential local industrial value chains.
Policy Recommendations for Strategic Stability
The brief concludes that safeguarding Nigeria’s future requires a balanced, long-term approach, asserting that strengthening refining capacity and moderating fuel prices are not mutually exclusive goals.
The following policy options are strongly recommended:
- Reinstate the 15% Import Duty: Reinstatement is deemed essential to immediately restore competitive balance and safeguard domestic refining investments.
- Provide Targeted Incentives: The Government should support refiners with reduced port charges, guaranteed crude supply agreements, and investment in pipeline and storage infrastructure to mitigate operational burdens.
- Strengthen Policy Predictability: A stable, multi-year industrial protection framework is necessary to reassure both domestic and global financial institutions supporting these critical projects.
- Guided Importation: Any temporary supply gaps should be managed through guided, quota-based importation that supplements, rather than supplants, domestic output.
“Nigeria must avoid short-term fixes that jeopardise long-term national interests,” the brief states. “Protecting domestic refining capacity is an urgent national imperative. Safeguarding the Dangote Refinery and Petrochemicals and emerging modular refineries aligns squarely with Nigeria’s long-term economic sovereignty and industrial future.”
