Nigerian Government Suspends 15 Percent Petrol Import Duty Amid Political Concerns And Stakeholder Pushback Nationwide

 

The Nigerian government has suspended the proposed 15 per cent import duty on petrol and diesel, a move that has drawn reactions from industry stakeholders and consumers across the country. A petroleum products marketer, who spoke anonymously, shed light on the reasons behind the government’s decision, suggesting that several economic and political factors contributed to the U-turn.

The marketer explained that one of the key reasons for halting the import duty was inadequate consultation within the government and with relevant stakeholders. While the proposed tariff aimed to generate additional revenue and potentially protect local refineries, it sparked debates about its implications for the nation’s fuel prices. He emphasized that the lack of sufficient internal and external dialogue played a significant role in the decision to pause the policy.

Political considerations also weighed heavily in the suspension of the import duty. According to the marketer, the possibility of higher petrol prices across the country could have political ramifications, particularly as elections draw near. He suggested that the government may have decided to step back from implementing the tariff to avoid public discontent and possible backlash from citizens already burdened by economic pressures.

Global insights, as highlighted during a recent MEMAN webinar, indicate that value-added tax on fuel typically averages around two per cent in other countries. The Nigerian government’s initial proposal of a 15 per cent tariff appeared to many as an attempt to boost revenue, but some critics interpreted it as a move to favor certain local refineries. Despite these interpretations, the marketer noted that importation of refined petroleum products would continue until local refineries could produce enough to meet national demand.

The federal government’s suspension of the tariff ensures that supply levels remain adequate while preventing any single entity from monopolizing the market. This development is expected to help stabilize fuel prices, providing relief to consumers and ensuring that economic disruptions are minimized. The decision also reinforces the government’s commitment to maintaining fuel availability, an essential aspect of national economic stability and day-to-day activities.

Before its suspension, the proposed import duty had sparked mixed reactions from economists, stakeholders, and Nigerians. Some praised the policy for its potential to encourage local refining and boost government revenue, while others expressed concern over the likely increase in pump prices and the perceived favoritism towards specific refineries. The marketer’s commentary reflects the broader national discourse, highlighting the delicate balance the government must maintain between economic strategy, political considerations, and public sentiment.

With the suspension in place, industry observers are optimistic that the fuel market will experience moderate prices and sufficient supply in the coming months. The government’s cautious approach demonstrates an awareness of the broader economic and political context, ensuring that critical decisions on fuel tariffs consider both national interests and citizen welfare.