Nigeria drops planned fuel import tariff, OPS faults suspension, a setback to Nigeria’s economic reform drive

Nigeria has suspended plans to impose a 15% import duty on petrol and diesel amid assurances of adequate supply during the year-end holidays, the downstream regulator said on Thursday. Meanwhile, Organized Private Sector Operator, such as Ogun State Chamber of Commerce, Industry, Mines and Agriculture (OGUNCCIMA) has faulted the Federal Government’s decision to suspend the proposed implementation of the 15 percent import duty on Premium Motor Spirit (PMS) and diesel imports, saying the move could slow down the nation’s progress toward energy independence and weaken investor confidence in the refining sector.

Reacting to the announcement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) that the tariff was “no longer in view,” OGUNCCIMA’s President, Lion Niyi Oshiyemi, described the suspension as a setback to Nigeria’s economic reform drive and a missed opportunity to protect local refiners, particularly the Dangote Refinery and other modular refining initiatives.

 According to him, “The suspension of the 15 percent fuel import tariff is disappointing. The policy was a step in the right direction to promote local refining, reduce dependence on imports, conserve foreign exchange, and create a fair competitive environment for domestic producers. Its reversal sends a wrong signal to investors who have shown confidence in Nigeria’s energy sector.” Oshiyemi explained that the tariff would have helped to stabilize the naira by curbing excessive demand for foreign exchange used in fuel importation.  He said that local refineries need firm policy backing to thrive, warning that continuous reliance on imported fuel would make the economy vulnerable to external shocks.

 “The Dangote Refinery alone has the capacity to meet Nigeria’s domestic fuel needs and even export to other African countries. Supporting such investments with protective policies like the import tariff is not just economic common sense; it is a matter of national interest,” he stated. The OGUNCCIMA President urged the Federal Government to reconsider its decision and reintroduce the policy after consultations with key stakeholders in the oil and gas industry. He emphasized that sustainable industrial growth requires consistency in policy direction, noting that frequent policy reversals discourage private sector participation and hinder long-term development.

 While acknowledging the government’s concern about potential short-term price increases, Oshiyemi maintained that the long-term gains including job creation, forex savings, and increased energy security far outweigh any temporary inconvenience. He reaffirmed OGUNCCIMA’s commitment to advocating policies that protect local industries and promote economic diversification. “We believe in reforms that empower Nigerian investors and strengthen our productive base. The 15 percent tariff was one of such reforms, and we urge the government to revisit it in the national interest,” he said.

 The tariff, approved by President Bola Tinubu as part of fiscal reforms to boost non-oil revenues, was disclosed in a leaked government memo last month. It was supposed to take effect in December. “The implementation of the 15% ad-valorem import duty on imported premium motor spirit and diesel is no longer in view,” the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said in a statement. Fuel marketers had lobbied against the measure, warning it could restrict imports and leave the country reliant on a single source, the 650,000-barrel-per-day Dangote Petroleum Refinery in Lagos.

Africa’s biggest oil producer spends millions of dollars each year importing fuels and this has continued even after the Dangote Petroleum Refinery began processing crude last year. The NMDPRA assured buyers of adequate supply during the holiday and warned against panic buying. “The Authority will continue to monitor supply and take necessary steps to avoid disruptions, especially during this peak demand period,” it said.