Follow Us on Google
By Merit Ibe
The Centre for the Promotion of Private Enterprise (CPPE) has raised concerns over the Federal Government’s suspension of the 15% import duty on petroleum products. It warned that the move could undermine Nigeria’s domestic refining capacity, jeopardize energy security, and erode investor confidence in the downstream sector.
In a policy brief released yesterday, the Director General of CPPE, Dr Muda Yusuf, said the suspension exposes local refiners to unfair competition from importers operating under far more favorable international conditions.
“The suspension of the 15% import duty exposes domestic refiners to inequitable competition and threatens transformational national assets such as the Dangote Refinery and emerging modular refineries.
“Investors made multi-billion-dollar commitments based on policy stability. Frequent reversals jeopardise these investments and Nigeria’s long-term energy security”, he said.
The import duty, CPPE noted, was introduced to support private refineries, encourage backward integration, protect jobs, conserve foreign exchange and stimulate local value addition. Its suspension, the centre warned, risks reversing hard-won gains in Nigeria’s refining sector.
Local refiners operate under high-cost conditions, including expensive energy and self-generation, inadequate infrastructure, logistics bottlenecks, high capital costs, and security challenges. “These structural disadvantages make it impossible for domestic refiners to compete with imported products without protective measures,” the brief said.
CPPE also highlighted broader national risks. “Reverting to heavy import dependence reopens vulnerabilities to global price volatility, geopolitical disruptions, and supply insecurity, the same factors that previously collapsed public refineries and created a costly subsidy regime,” Dr. Yusuf explained.
Other News
The centre further warned that increased imports would exacerbate foreign exchange pressure, fuel inflation through exchange-rate pass-through, and deepen balance-of-payments deficits. Domestic refining, the brief stressed, stimulates broad value-chain activities across petrochemicals, plastics, logistics, engineering services, fabrication, and construction. Unrestrained importation, it said, effectively exports these jobs and opportunities to foreign economies.
Investor confidence, CPPE added, is also at stake. “Policy reversals weaken investor sentiment across refining, downstream operations, domestic manufacturing, financial institutions, and global investment partners,” Dr. Yusuf said. “Undermining confidence at this stage threatens the viability of strategic national assets.”
The brief underlined that fair competition requires comparable operating conditions. Nigerian refiners contend with infrastructure deficits, elevated logistics costs, insecure operating environments, and weak storage systems, challenges that importers do not face. CPPE pointed out that global evidence supports industrial protection for strategic sectors, citing policies in the U.S., EU, India, and China. “Extending similar protection to domestic refining is both logical and necessary,” it said.
CPPE also dispelled the notion that domestic refining and price moderation are mutually exclusive.
“With the right policy mix, including fiscal incentives, logistics support, transparent pricing, and guided importation, Nigeria can achieve both domestic capacity strengthening and price stability,” the brief said.
To safeguard the sector, CPPE recommended immediate reinstatement of the 15% import duty, targeted production and infrastructure incentives, guaranteed crude supply, access to moderated foreign exchange for essential inputs, and multi-year industrial protection frameworks. The centre also urged strengthened market monitoring to track domestic production, pricing patterns, import volumes, and compliance.
“Nigeria must avoid short-term measures that jeopardize long-term national interests,” Dr. Yusuf concluded. “Protecting domestic refining capacity is an urgent national imperative and aligns squarely with Nigeria’s strategic economic goals.”
