AN economist and former Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, says the Nigerian government should protect local petrol refiners by reinstating the suspended 15 percent duty on petroleum products.
Yusuf, who is the Chief Executive Officer of the Center for the Promotion of Private Enterprise (CPPE), said this in a statement on Sunday in reaction to the Nigerian government’s suspension of the 15 percent import duty on petrol.
In a statement posted on its X handle on November 13, Director of Public Affairs Department, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr George Ene-Ita, had announced the government’s suspension of the 15 percent import duty on petroleum products, which it had earlier scheduled to begin any moment from now.
According to Mr Ene-Ita, “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.”
The announcement has divided Nigerians, with many saying it is the right decision considering its impact on petrol prices, and a few others noting it should never have happened.
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Yusuf is part of the latter school of thought who believes that the suspension was ill-advised. “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,” he said.
“Suspending the duty undermines this protective framework and exposes domestic refiners to inequitable competition from importers benefiting from vastly superior international conditions.”
He said local refiners operated 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.
He noted that these structural disadvantages made parity with imported products impossible without protective measures. He explained that “reverting to heavy import dependence reopens vulnerabilities to global price volatility, geopolitical disruptions, and supply insecurity—the same conditions that previously collapsed public refineries and created a fiscally ruinous subsidy regime.”
Dr Yusuf further said that the decision to remove the 15 percent duty on petrol would heighten pressure on the naira, fuel inflation through exchange-rate pass-through, deepen balance-of-payments deficits, and undermine macroeconomic stability.
He noted that it would lead to loss of jobs in value chains such as fabrication and construction, petrochemicals, plastics, logistics and transport, as well engineering services.
“Unrestrained importation effectively exports these jobs and opportunities to foreign economies,” he said, noting that the move could hurt investor confidence.
The former DG of the LCCI reminded President Bola Tinubu that Nigeria already maintained an Import Adjustment Tax List for strategic sectors such as agro allied, cement, sugar, steel, pharmaceuticals, and automobiles, stressing that extending similar protection to domestic refining was both logical and necessary.
He further said that strengthening refining capacity and moderating fuel prices were not mutually exclusive, noting that with the right policy mix – including fiscal incentives, logistics support, transparent pricing, and guided importation – Nigeria could achieve both goals simultaneously.
Why govt should reinstate 12% petrol duty
The economist called for the reinstatement of the 15 percent duty, explaining that it was essential to restoring competitive balance and safeguarding domestic refining investments.
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He stressed that protecting domestic refining capacity “is an urgent national imperative.” He said that reinstating protective measures, supporting local refiners, ensuring policy predictability, and regulating import volumes were 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.”
Economy Post had reported that the duty would raise petroleum products by nearly N100 per litre.
Other experts disagree
Earlier, economists and petrol experts had told Economy Post that the tariff on petrol and diesel would raise the price of petrol products and create monopoly in the industry while stifling competition.
Nigeria imports about 60 percent of its refined petroleum products, while about 40 percent comes from local refineries, almost solely from Dangote Petroleum Refinery.
“First, it will raise the cost of petrol at this time when the cost of living is extremely higher,” said a United Kingdom-based finance lecturer, Dr Matthew Onyemaechi.
“It will have an adverse effect on inflation, which is now decelerating. So, I do not understand why Nigeria is now adopting a protectionist policy when the industry should be thrown open to encourage competition. When you have competition, prices will fall, or at least, remain at equilibrium points. But when you leave the market to one player, you won’t even know what the true price should be,” he added.
A university teacher of economics in a South-West Nigerian university, Dr Oluwadare Olumuyiwa, had said he was worried about the effect on competition.
“The first duty of the government is to protect everyone. When you protect an entity over citizens, you have failed in your duty as the government. This particular policy will discourage market fairness and shut down a number of marketing companies. The effect it will have on inflation should also be studied.”
