CPPE tells FG, economic risks in suspension of 15% fuel import duty

The Centre for the Promotion of Private Enterprise (CPPE) has cautioned that the Federal Government’s suspension of the 15 percent import duty on petrol and diesel could undermine Nigeria’s domestic refining capacity, destabilize investor confidence, and expose the country to renewed energy insecurity.

In a policy brief released on Sunday and signed by the Centre for the Promotion of Private Enterprise (CPPE), Chief Executive Officer, Dr. Muda Yusuf, said the suspension poses serious economic and strategic risks, particularly for private-sector investments such as the Dangote Refinery and modular refinery projects that relied on policy stability for their multi-billion-dollar commitments.

According to the CPPE, the import duty was originally introduced to promote backward integration, support emerging private refineries, conserve foreign exchange, protect jobs and stimulate local value addition, and ensure a level playing field for domestic producers and encourage long-term investments in refining and petrochemicals.

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

The CPPE raised key concerns arising from the duty suspension as threat to Domestic Refining Investments, noting that local refiners operate within a high-cost environment shaped by: Expensive energy and self-generation, Infrastructure gaps and logistics bottlenecks, High cost of capital, Security-related risks and Inefficiencies in ports and transport systems.

Yusuf averred that the suspended duty was a critical industrial protection measure crafted to support emerging refineries, promote backward integration, conserve foreign exchange, protect jobs, and create a level playing field for local producers operating under difficult conditions.

According to him, domestic refiners face a structurally high-cost environment marked by expensive energy, logistics bottlenecks, poor infrastructure, high capital costs, and security-related risks, disadvantages that foreign refiners and importers do not share.

He also warned that removing the duty exposes local producers to inequitable competition from importers operating under far more favourable conditions.

“The suspension threatens Nigeria’s aspiration for self-sufficiency in petroleum products and reopens the economy to vulnerabilities associated with global price shocks, supply disruptions, and foreign exchange pressures,” he stated.

Yusuf further warned that a renewed reliance on petroleum imports would intensify demand for scarce foreign exchange, weaken the naira, fuel inflation, and worsen the balance-of-payments deficit as well as trigger job losses across the refining, petrochemicals, logistics, and manufacturing value chains.

The CPPE expressed grave concern over the potential erosion of investor confidence, arguing that frequent policy reversals discourage long-term planning and threaten the viability of major national assets, including large-scale and modular refineries.

Yusuf argued that there is a need to address short-term supply concerns, but that dismantling protective measures was not the answer.

However, he recommended guided, quota-based importation to fill temporary supply gaps without jeopardising domestic capacity.

The Centre urged the Federal Government to immediately reinstate the 15 per cent duty, introduce targeted incentives for local refiners, strengthen infrastructure support, and provide policy predictability under a “Nigeria First” industrial protection framework.

He opined that safeguarding the Dangote Refinery and modular refineries was essential to securing Nigeria’s long-term economic and strategic interests.

“Nigeria must avoid short-term measures that jeopardise long-term national interests. The suspension of the 15% import duty puts at risk: Energy security, Industrialisation, Foreign exchange stability, Job creation, Backward integration, National economic sovereignty.

“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,” Yusuf emphasized.