15% Fuel Import Duty Suspension Could Cripple Domestic Refining

The Centre for the Promotion of Private Enterprise (CPPE) has warned that the federal government’s suspension of the 15 per cent import duty on petrol and diesel poses a significant threat to Nigeria’s domestic refining capacity, energy security, and long-term industrial development.

The Centre urged the government to safeguard Nigeria’s domestic refining capacity and energy security.

The director-general of CPPE, Dr Muda Yusuf, stated that Nigeria was at a decisive moment in its efforts to secure energy independence, deepen industrialisation, and reduce vulnerability to external shocks.

He noted that the federal government’s suspension of the 15 per cent import duty on petrol and diesel carried profound implications for domestic refining, investment confidence, macroeconomic stability, and the long-term competitiveness of the petroleum downstream sector.

Yusuf pointed out that investors, including the Dangote Refinery and modular refinery operators, made multi-billion-dollar commitments based on policy stability and the assurance of an environment that rewards local production.

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

He insisted that reverting to heavy import dependence reopened vulnerabilities to global price volatility, geopolitical disruptions, and supply insecurity, the same conditions that previously collapsed public refineries and created a fiscally ruinous subsidy regime.

He disclosed that, “Nigeria already maintains an Import Adjustment Tax List for strategic sectors such as agro allied, cement, sugar, steel, pharmaceuticals, and automobiles. Extending similar protection to domestic refining is both logical and necessary.”

He added that, “strengthening refining capacity and moderating fuel prices are not mutually exclusive. With the right policy mix, including fiscal incentives, logistics support, transparent pricing, and guided importation, Nigeria can achieve both goals simultaneously.

According to CPPE DG, while domestic refineries are expected to meet national demand within a short horizon, temporary supply gaps should be addressed not by dismantling protective measures but through guided, quota-based importation to supplement domestic output.

CPPE stated that reinstating the 15 per cent Import Duty was essential to restoring competitive balance and safeguarding domestic refining investments, calling for targeted production and infrastructure incentives such as reduced port charges and logistics costs, tax credits or rebates for domestic refiners, guaranteed crude supply agreements, access to moderated FX for essential inputs, and investment in pipeline and storage infrastructure.

He also said that a stable, multi-year industrial protection framework under the Nigeria First Policy was necessary to reassure investors and support long-term planning.

He added that “Nigeria must avoid short-term measures that jeopardise long-term national interests. The suspension of the 15 per cent import duty puts at risk: energy security, industrialisation, foreign exchange stability, job creation, backward integration, and national economic sovereignty. ”

Yusuf emphasised that “protecting domestic refining capacity is an urgent national imperative. Reinstating protective measures, supporting local refiners, ensuring policy predictability, and regulating import volumes are essential steps toward securing Nigeria’s industrial future.

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