‘Petrol import duty suspension threatens energy security’

The Centre for the Promotion of Private Enterprise has warned that the suspension of the 15 per cent import duty on petrol and diesel threatens Nigeria’s long-term energy security, discourages investment, and endangers major assets such as the Dangote Petroleum Refinery and modular refineries. It called on the Federal Government to reinstate the suspended import duty policy.

The Chief Executive Officer of CPPE, Dr Muda Yusuf, issued the warning in a policy brief released on Sunday, stressing that the suspension “is a short-term measure that jeopardises long-term national interests.”

The Federal Government first introduced a 15 per cent import duty on petrol and diesel on October 21, 2025, to protect emerging private refineries, promote backward integration, and reduce Nigeria’s dependence on imported fuel.

The government designed the policy to help domestic refiners compete despite high operating costs, weak infrastructure, and expensive financing, while also conserving foreign exchange and supporting local value addition. While most organised private sector groups, including the Manufacturers Association of Nigeria, welcomed the policy as a strategic move to protect local industry, other stakeholders warned that it would lead to a spike in fuel prices.

However, the Federal Government suspended the duty to ease short-term pressure on fuel prices. The suspension has led to further appeals from private sector stakeholders, including Yusuf, who maintained that the duty was meant to ensure a level playing field for domestic producers, conserve scarce foreign exchange, and protect jobs.”

The CPPE chief added that investors, including the Dangote Refinery and modular operators, committed billions of dollars “based on policy stability and the assurance of an environment that rewards local production.”

He warned that removing the duty “undermines this protective framework and exposes domestic refiners to inequitable competition from importers benefiting from vastly superior international conditions.”

The organisation stated that local refiners operate in a high-cost environment marked by expensive energy, infrastructure gaps, logistics bottlenecks, high financing costs and security risks. It stressed that these challenges make price parity with imported fuel “impossible without protective measures.”

Yusuf cautioned that the reversal would reopen Nigeria to the vulnerabilities that previously wrecked state-owned refineries, noting that increased dependence on imports would expose the country to global price volatility, geopolitical disruptions, and supply insecurity.

He added that petrol importation is already one of the biggest pressures on the foreign exchange market, warning that increased imports would “heighten pressure on the naira, fuel inflation and deepen balance-of-payments deficits.”

The CPPE maintained that domestic refining drives value chains in petrochemicals, plastics, logistics, engineering and fabrication. According to the brief, “unrestrained importation effectively exports these jobs and opportunities to foreign economies.”

It also warned that frequent policy reversals “weaken investor sentiment” and threaten the viability of what Yusuf described as “transformational national assets such as the Dangote Refinery and modular refineries.”

The group argued that every major economy protects key sectors, noting: “The US protects steel, agriculture, aviation and energy; the EU protects manufacturing and pharmaceuticals; India protects refining; China deploys a comprehensive industrial policy.” It said Nigeria already maintains an Import Adjustment Tax List for sectors such as cement, steel, pharmaceuticals, and automobiles. The CPPE insisted that extending similar protection to refining “is both logical and necessary.”

Yusuf dismissed claims that protection for refineries will raise fuel prices, arguing that strengthening local capacity and moderating pump prices are “not mutually exclusive.” It said domestic refining reduces long-term costs by limiting exposure to foreign exchange and global supply disruptions.

It maintained that temporary supply gaps should be addressed through “guided, quota-based importation,” not by dismantling protective policies.

The organisation urged the government to immediately reinstate the duty, provide targeted incentives such as reduced port charges, tax credits, moderated foreign exchange access and guaranteed crude supply for domestic refiners, and strengthen pipeline and storage infrastructure.

It also called for predictable multi-year industrial protection under the Nigeria First Policy and tighter monitoring of production capacity, pricing and import volumes.

Yusuf concluded that Nigeria “must avoid short-term measures that jeopardise long-term national interests,” stressing that the suspension of the duty puts at risk the country’s energy security, industrialisation, FX stability, job creation and economic sovereignty.

He added, “The Dangote Refinery and emerging modular refineries are transformative national assets. Safeguarding them aligns squarely with Nigeria’s long-term economic and strategic goals.”