Suspension of Import Duty on Fuel Products
Marketers and stakeholders in the downstream sector of the oil and gas industry have welcomed the suspension of the 15% ad-valorem import duty on imported Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO), commonly known as petrol and diesel. The move has been seen as a response to concerns about the feasibility of the levy until Nigeria achieves local sufficiency in refining.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced the suspension of the levy in a statement signed by George Ene-Ita, Director of the Public Affairs Department. The authority assured the public that there is adequate supply of petroleum products across the country, maintaining volumes within the acceptable national sufficiency threshold during this peak demand period.
“The Authority wishes to use this opportunity to advise against any hoarding, panic buying or non-market reflective escalation of prices of petroleum products,” the statement said. It also emphasized that the implementation of the 15% ad-valorem import duty on imported PMS and Diesel is no longer in view.
According to NMDPRA, there is robust domestic availability of petroleum products—including PMS, AGO, and Liquefied Petroleum Gas (LPG)—sourced from both local refineries and importation, ensuring timely replenishment of stocks at depots and retail outlets nationwide. The authority will continue to closely monitor the supply situation and take appropriate regulatory measures to prevent disruption of supply and distribution of petroleum products across the country, especially during this peak demand period.
Mixed Reactions to the Import Duty
The introduction of the 15% import duty had generated mixed reactions in the downstream industry. While some saw it as a measure to protect local refineries, others feared it could trigger fuel price increases, placing a burden on Nigerians.
The Major Energies Marketers’ Association of Nigeria (MEMAN) specifically stated that the 15% import duty would trigger an upward rise in prices of the products. Executive Secretary of MEMAN, Mr. Clement Isong, warned that the tariff would significantly impact pump prices of PMS as well as diesel prices, which may sell for about N1,100 and N1,200 per litre respectively while imposing fresh hardship on Nigerians.
However, the Dangote Refinery, the largest single train refinery in Nigeria, had boasted of its ability to meet the daily consumption by Nigerians. The facility delivers 45 million litres of premium motor spirit (PMS) and 25 million litres of diesel on a daily basis while reaffirming its commitment to ensuring a steady and uninterrupted supply of the products nationwide.
Despite assurances from Dangote, the opposition to the import duty continued until yesterday when the proposal was suspended. A major marketer and CEO of 11PLC, Otunba Adetunji Oyebanji, noted that there was a lot of push back from various quarters, with many supporting the measure. He suggested that the U-turn must have been informed by inadequate consultation within and outside government as well as the political implications of likely higher pump prices.
Expert Opinions on the Policy Shift
A renowned professor of petroleum economics, Prof. Wumi Iledare, described the reversal as typical Nigerian politics. He compared it to past actions during the Structural Adjustment Programme (SAP) era, where intellectual advice was sidelined in favor of political expediency. He stressed that politicians are often averse to intellectual input when it challenges short-term political interests, and unfortunately, politics continues to trump economics.
Dr. Paul Alaje, a foremost economist, welcomed the import duty initially on the ground that Nigeria has local sufficiency in fuel production. However, he pointed out that NNPCL has said that we don’t have full sufficiency. He emphasized that the government should conduct evidence-based research before introducing any policy, stating that if we have reached sufficiency, then where are those people selling their import?
Economic expert Samuel Caulcrick warned that the import duty could have triggered trade wars. He cited a 2019 study on the United States (U.S.) tariffs, which showed that American households paid an additional $3,300 annually due to tariff-induced price increases. He urged the Federal Government to draw lessons from China’s industrial growth model, which combined protectionist measures with foreign investment incentives, export-oriented policies, and technological development, not tariffs alone.
Implications of the Suspension
The suspension of the import duty means that importation will continue until enough product is available through the local refineries. This development is expected to ensure supply is adequate and that prices are moderated since no single entity will have monopoly of supply.
Prof. Iledare added that the 15% import duty should have been viewed as a fiscal and market-stabilising instrument, not a political gesture. He emphasized that the intent was clear—to protect emerging local refineries, encourage domestic value addition, and gradually align Nigeria’s downstream market with its growing industrial capacity.
He concluded that economics and evidence must guide policy; politics should only enable implementation. Until then, the nation will keep circling around the same structural problems.
