Suspending fuel import duty endangers jobs, FX stability, energy independence

The Centre for the Promotion of Private Enterprise (CPPE) warned that Nigeria’s suspension of the 15 per cent import duty on petrol and diesel could weaken domestic refining, hurt investor confidence and raise pressure on the naira, according to a policy brief issued on Sunday.

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On 13 November, the federal government suspended the duty, a charge earlier approved by President Bola Ahmed Tinubu in October 2025. The duty had sparked concern across the oil and gas sector, with operators warning it would push up pump prices, fuel inflation and raise import costs. The measure was intended to encourage local refining and boost revenue.

CPPE said the duty had been introduced to protect emerging refineries, support backward integration and ensure a level playing field for local producers.

It argued that domestic refiners operate in a high-cost environment marked by poor infrastructure, expensive energy, limited access to finance and security-related risks.

“These structural disadvantages make parity with imported products impossible without protective measures,” CPPE’s chief executive, Muda Yusuf, said.

The group said the policy reversal could expose companies like the Dangote Refinery and modular refiners to unfair competition, undermine multi-billion-dollar investments and weaken Nigeria’s long-term industrial goals.

FX, energy security and jobs

CPPE said a rise in fuel imports would escalate foreign-exchange demand, intensify inflation through exchange-rate pass-through and widen the country’s balance-of-payments deficit.

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It added that increased import dependence would reopen vulnerabilities to global price shocks, supply disruptions and geopolitical risks.

The group also warned that unrestrained importation would shift jobs and value-chain activities, including petrochemicals, plastics, logistics and engineering, to foreign markets. Frequent policy reversals, it said, weaken sentiment across manufacturing, refining and financial sectors.

“Undermining confidence at this stage threatens the viability of transformational national assets such as the Dangote Refinery and modular refineries,” Mr Yusuf said.

Recommendations

The think tank urged the government to reinstate the duty to restore competitive balance and protect local capacity.

It also recommended targeted production incentives, reduced port charges, guaranteed crude supply, moderated FX access for critical inputs, and investment in pipelines and storage.

It called for stronger market monitoring to track domestic output, import volumes, pricing behaviour and competition trends.

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A multi-year protection framework under the Nigeria First Policy, it said, would help stabilise investor expectations.

Nigeria, Africa’s biggest oil producer, still depends heavily on imported refined fuel because its state-owned refineries remain shut after years of underinvestment.

However, the start-up of the Dangote Refinery has begun to reduce this reliance, with Nigeria now sourcing part of its petrol and diesel locally.

The government views new private-sector refineries like Dangote’s as key to improving energy security, cutting FX exposure and rebuilding industrial capacity.

CPPE said safeguarding these assets aligns with national priorities on energy independence, job creation and economic sovereignty.