Mixed Reactions As Federal Govt Suspends 15% Fuel Import Tax

The suspension of the planned implementation of a 15 per cent ad-valorem import duty on petrol and diesel imports has generated mixed reactions across the industry and economic stakeholders.

The 15 per cent import duty policy, scheduled to come into effect from November 21, 2025,  was initially approved by President Bola Tinubu in October, aimed at promoting local refining and reducing fuel import dependence.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) officially announced the halt on Thursday, citing a need to respond to public concerns amid inflationary and currency pressures affecting households and businesses.

Recall that the federal government had stated the import duty was designed as an ad-valorem tariff aimed at protecting emerging local refineries, such as the Dangote Refinery, which has a capacity of 650,000 barrels per day, as well as smaller modular refineries. The goal was to encourage investment in domestic refining capacity, create jobs, foster GDP growth, and strengthen Nigeria’s energy security by reducing imports.

In a post on its X handle on Thursday, the NMDPRA said, “It should also be noted that the implementation of the 15 per cent ad-valorem import duty on imported Premium Motor Spirit and Diesel is no longer in view.”

Signed by its director, Public Affairs Department, NMDPRA, George Ene-Ita, the NMDPRA also assured all that there is an adequate supply of petroleum products in the country, within the acceptable national sufficiency threshold, during this peak demand period.

“While appreciating the continued efforts of all stakeholders in the midstream and downstream value chain in ensuring a smooth and uninterrupted supply and distribution, the public is hereby assured of NMDPRA’s commitment to guarantee energy security,” the agency stated.

Also shedding light on the policy suspension, the director of Legal Services at NMDPRA, Dr Joseph Tolorunse, explained the government’s rationale: “The government intended to stimulate investment and shield local industries from being undercut by cheaper imports. While prices may rise in the short term, the long-term benefits would include job creation, GDP growth, and greater self-sufficiency.”

Tolorunse, who spoke during the maiden conference of the Energy Correspondents Association of Nigeria (ECAN), in Abuja on Thursday, said. “In the short run, prices may go up, but in the long run, the country would have benefited through job creation, GDP growth, and greater self-sufficiency.”

Tolorunse added that while the administration remains committed to its long-term industrial goals, “it is also sensitive to public outcry,” prompting a temporary pause in the rollout of the policy.

However, the suspension has sparked divergent views among policymakers, economists, petroleum industry stakeholders, and business groups.

Energy analysts and industry players have welcomed the rollback, describing it as a necessary lifeline for households and businesses already stretched by inflation and currency pressures. Yet, many warn that the relief could delay critical structural reforms in Africa’s largest oil producer.

“This is a very good move. High costs are already burdening Nigerians, so cancelling it is something we should applaud,” said Henry Adigun, an oil policy expert. “In a country where you don’t have local production sufficiency, imposing a tariff on imports is counterproductive.”

Adigun said the tariff was “flawed from the beginning,” highlighting a policy disconnect between the government’s fiscal drive and the realities of Nigeria’s import-dependent energy market. “Once you get enough local production, then you can put tariffs to discourage others. The logic was premature,” he added.

Also, petroleum marketers and their representative bodies expressed relief at the suspension, highlighting concerns about competition and consumer protection.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) stated that the tariff threatened to encourage monopolistic practices, potentially distorting the deregulated downstream market.

PETROAN’s president, Dr Billy Gillis-Harry, remarked, “We are not against tariffs per se, but the imposition of this tax would harm business and investments in the sector. A fair, competitive market that allows importation to supplement local production is essential.”

He praised President Tinubu’s responsiveness: “Stepping down the policy shows he has a listening ear and understands economic realities.”

Dr. Gillis-Harry further explained that Nigeria’s downstream market, valued at about N1.2 trillion (approximately $3 billion), is projected to grow annually by five per cent between 2025 and 2030. “

The subsidy removal ushered in market liberalisation, allowing private sector participation and ending decades of government price control. We have consistently cautioned against monopolistic practices, especially with the rise of mega-refineries and dominant importers,” he added.

According to him, a diverse playing field with modular refineries, the Nigerian National Petroleum Corporation (NNPC), Dangote Refinery, and independent marketers operating freely is crucial for sector health.

On its part, the Petroleum Dealers Association of Nigeria (PEDAN), through its National Secretary Ibrahim Shehu Yahaya, also opposed the imposition, asserting that the 15 per cent tax contravened the Petroleum Industry Act (PIA) provisions which promote fair competition and energy security. Yahaya stressed the need for operational fairness to encourage private investment in refining.

Conversely, the Ogun State Chamber of Commerce, Industry, Mines and Agriculture (OGUNCCIMA) criticised the suspension sharply.

OGUNCCIMA President Lion Niyi Oshiyemi described the rollback as a “setback to Nigeria’s economic reform drive and a missed opportunity to shield our local refineries.”

He emphasised, “The decision to suspend the 15 per cent import tariff is deeply disappointing. This policy was a step in the right direction to foster local refining, reduce import dependency, conserve foreign exchange, and ensure a level playing field for domestic producers.”

Oshiyemi warned that the reversal “sends a wrong signal to investors, undermining confidence in Nigeria’s energy sector.”

He highlighted the Dangote Refinery’s capacity to meet domestic fuel needs and export to other African countries.

“Supporting such investments with protective policies like the import duty is not just economic prudence; it is a matter of national interest.” Oshiyemi urged the federal government to reconsider the suspension, emphasising that “sustainable industrial growth requires consistent policy direction. Frequent reversals deter private sector participation and impede long-term development.”

While acknowledging government concerns about short-term price impacts, he insisted that “the long-term benefits—including job creation, foreign exchange savings, and energy security—far outweigh temporary inconveniences.”

Economic analyst and policy advocate Dr Muda Yusuf of the Centre for the Promotion of Private Enterprise (CPPE) also expressed disappointment over the suspension. He maintained, “The 15 per cent import duty on refined petroleum products was a positive, forward-looking policy step that could catalyse industrial expansion, conserve forex reserves, create jobs, and promote economic resilience if accompanied by broader industrial support measures.”

Yusuf elaborated, “Nigeria’s path to sustainable industrialisation must be grounded in strategic, time-bound protectionism—not unrestrained liberalisation. No country has industrialised by exposing its industries indiscriminately to imports.”

He described the continuous importation of petroleum products as imposing “immense costs on the economy, such as pressures on forex reserves, fiscal instability, and the collapse of domestic refining.”

Yusuf argued, “A modest 15 per cent protection would provide the policy support needed for domestic refineries, including Dangote, NNPCL, and emerging modular plants, to thrive and reduce forex vulnerability.”

He added, “Protectionism, when pragmatic and disciplined, empowers domestic industries to compete globally. The goal is not to shut out the world but to build Nigeria’s strength to engage it confidently.”

He questioned the government’s decision, expressing concerns about how best local refining companies would be shielded henceforth.Seeking comments, the Crude Oil Refiners Association of Nigeria (CORAN) indicated ongoing consultations and promised to issue a formal position on the tariff suspension soon.

When contacted the secretariat of the Crude Oil Refiners Association of Nigeria (CORAN) told our correspondent that the Association is making consultations and would come up with a position on the announcement.

LEADERSHIP reports that in a statement posted on its X handle on Thursday, the director, Public Affairs Department, NMDPRA, George Ene-Ita, said, “It should also be noted that the implementation of the 15 per cent ad-valorem import duty on imported Premium Motor Spirit and Diesel is no longer in view.”

Recall that President Bola Tinubu approved the introduction of a 15 per cent ad-valorem import duty on petrol and diesel imports into Nigeria.

The NMDPRA also assured all that there is an adequate supply of petroleum products in the country, within the acceptable national sufficiency threshold, during this peak demand period.

“While appreciating the continued efforts of all stakeholders in the midstream and downstream value chain in ensuring a smooth and uninterrupted supply and distribution, the public is hereby assured of NMDPRA’s commitment to guarantee energy security,” the statement read.

Mixed Reactions As Federal Govt Suspends 15% Fuel Import Tax