The Centre for the Promotion of Private Enterprise (CPPE) has strongly criticized the Federal Government’s decision to suspend the planned 15 percent import duty on petrol and diesel. In a policy paper titled “Safeguarding Nigeria’s Domestic Refining Capacity and Energy Security,” CPPE argues that the suspension sacrifices long-term national interests for short-term gains.
CPPE’s founder and CEO, Dr. Muda Yusuf, warns that without protective measures, local refineries, including the Dangote Refinery and emerging modular refineries, will suffer a structural disadvantage. He says these refineries are strategic national assets and deserve support, not to be undermined by cheaper imported fuel.
Yusuf puts it clearly: “Nigeria must avoid short-term measures that jeopardise long-term national interests.” He argues that the 15 percent duty was not just a tax, but a critical industrial protection tool designed to level the playing field between local producers and importers.
According to the CPPE, suspending the duty threatens Nigeria’s energy security, industrial development, foreign-exchange stability, job creation, backward integration, and economic sovereignty. Without tariffs, local refining firms will struggle to compete against lower-cost imports that benefit from global economies of scale.
Yusuf also points out that domestic refining in Nigeria faces high production costs. Local refineries operate in a difficult environment: energy is expensive, infrastructure is weak, logistics are inefficient, and security and transport costs are high. These disadvantages make it almost impossible for them to match the price of imported petroleum without government protection.
He warns further: lifting the duty risks pushing Nigeria back into heavy import dependence, making the economy vulnerable to global price swings, geopolitical disruptions, and supply instability, the same problems that once sank public refineries and fueled expensive national subsidies.
The CPPE also stresses that the petroleum import business drains Nigeria’s foreign reserves. This weakness increases pressure on the naira, deepens balance-of-payments deficits, and can contribute to inflation through exchange-rate pass-through.
Beyond refining, CPPE believes that domestic petroleum production supports a broader industrial chain: petrochemicals, plastics, logistics, transport, fabrication, construction, and engineering. If imports dominate, Nigeria effectively exports these jobs and economic opportunities to other countries.
Investor confidence is another casualty, Yusuf warns. He argues frequent policy reversals weaken trust among local and foreign investors in Nigeria’s refining sector. “Undermining confidence at this stage threatens the viability of transformational national assets such as the Dangote Refinery and modular refineries,” he says.
To address both short- and long-term goals, CPPE recommends several policy steps: reinstating the 15 percent duty, supporting local refineries with clear and stable policy, regulating import volumes, and safeguarding long-term investment. Yusuf argues that this approach would help preserve Nigeria’s refining industry without sacrificing energy security or economic stability.
In sum, the CPPE is calling for a balanced strategy, not just immediate relief for consumers, but a carefully managed policy that ensures Nigeria’s energy future, industrial growth, and financial stability are not sacrificed for short-term convenience.
