Amanze Chinonye
The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that the Federal Government’s suspension of the 15 per cent import duty on petrol and diesel poses significant risks to Nigeria’s domestic refining investments, foreign exchange stability and long-term energy security.
In a policy brief released on Sunday, CPPE Chief Executive Officer, Dr Muda Yusuf, said the decision undermines ongoing efforts to build a self-sufficient petroleum sector and could expose the country to renewed import dependence, price volatility, and macroeconomic instability.
Yusuf explained that the import duty, originally introduced as a protective measure, was designed to support emerging private refineries such as the Dangote Refinery and numerous modular refinery projects. He said investors made multi-billion-dollar commitments based on assurances of a stable policy environment that rewards local production.
Join our WhatsApp ChannelAccording to him, removing the duty places domestic refiners at a structural disadvantage against importers who operate under far more favourable global conditions. “Local refiners contend with high energy costs, logistics bottlenecks, expensive financing and security challenges. Competing with foreign refiners without protection is unrealistic,” he said.
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Energy Security and FX Stability at Risk
The think tank warned that reverting to heavy import dependence would heighten Nigeria’s exposure to global supply disruptions and geopolitical shocks factors that previously contributed to the collapse of state-owned refineries and fuel subsidy burdens.
It added that increased importation would intensify pressure on Nigeria’s foreign exchange reserves, worsen inflation through exchange-rate pass-through and deepen balance-of-payments challenges.
Threat to Jobs, Industrial Growth and Investor Confidence
CPPE noted that domestic refining anchors value chains in petrochemicals, plastics, engineering and transport, and that growing import volumes would effectively export these opportunities to foreign economies.
The brief also expressed concern that policy reversals would further erode investor confidence in the manufacturing and energy sectors. “This threatens the viability of transformational national assets such as the Dangote Refinery and modular refineries,” Yusuf said.
Global Precedent for Protecting Strategic Industries
Arguing that protectionist frameworks are internationally recognised tools for safeguarding strategic assets, CPPE cited examples from the United States, European Union, India and China, all of which maintain strong industrial protection regimes.
Nigeria itself protects several sectors including sugar, cement, steel and automobiles through its Import Adjustment Tax List, and the organisation said domestic refining deserves similar strategic backing.
Policy Recommendations
The CPPE proposed the reinstatement of the 15 per cent import duty as an immediate step to restoring competitive balance in the downstream petroleum market. Additional recommendations included:
- Targeted incentives such as reduced port charges, tax credits and guaranteed crude supply for local refiners.
- Improved logistics and storage infrastructure to ease operating costs.
- Policy predictability to reassure long-term investors.
- Strengthened government oversight to monitor production capacity, pricing and market conduct.
A Long-Term National Imperative
Yusuf stressed that Nigeria must avoid short-term decisions that undermine its long-term industrialization and energy independence goals. “Protecting domestic refining capacity is an urgent national imperative,” he said.
“Safeguarding the Dangote Refinery and modular refineries aligns squarely with Nigeria’s strategic economic future.”
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
