The Centre for the Promotion of Private Enterprise (CPPE) has warned that the recent suspension of the 15 per cent import duty on fuel and diesel will pose a significant threat to domestic refining and investment in the downstream sector.

The Federal Government had proposed a 15 per cent import duty on fuel and diesel in the new tax law meant to take effect from 1 January 2026.
The government, however, last week suspended the import duty owing to complaints from stakeholders, especially those in the oil sector, claiming the tax could lead to escalated prices of the products and potentially create a monopoly.

But CPPE, which had earlier argued in favour of the tax, insisting that there is a need for strategic protectionism to safeguard local businesses, said the suspension of the tax by government raises grave concerns for investment in the country.

The Centre, in a policy brief titled Safeguarding Nigeria’s Domestic Refining Capacity and Energy Security: Policy Imperatives Following the Suspension of the 15 per cent Import Duty on Petroleum Products, and signed by its Chief Executive Officer, Dr Muda Yusuf, said the Federal Government’s suspension of the 15 per cent import duty on petrol and diesel carries profound implications for domestic refining, investment confidence, macroeconomic stability, and the long-term competitiveness of the petroleum downstream sector.

It said the 15 per cent import duty served as an industrial protection instrument designed to support emerging private refineries; promote backward integration and industrial development; ensure a level playing field for domestic producers; conserve scarce foreign exchange; protect jobs and stimulate local value addition; reduce exposure to global supply instability; and encourage long-term investments in refining and petrochemicals.

“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,” it said.
“Suspending the duty undermines this protective framework and exposes domestic refiners to inequitable competition from importers benefiting from vastly superior international conditions.”

It said key concerns arising from the duty suspension include threats to domestic refining investments, noting that local refiners operate 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.

“These structural disadvantages make parity with imported products impossible without protective measures,” it noted.
CPPE said 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.

It noted that, besides this, other risks associated with the suspension include increased pressure on foreign exchange, noting that petroleum importation is one of Nigeria’s largest consumers of FX.

While recommending that government reinstate the 15 per cent import duty to restore what it called competitive balance and safeguard domestic refining investments, the Centre also urged the government to provide targeted production and infrastructure incentives, strengthen policy predictability, and intensify market monitoring.

“Nigeria must avoid short-term measures that jeopardise long-term national interests,” it said, adding, “The suspension of the 15 per cent import duty puts at risk energy security, industrialisation, foreign exchange stability, job creation, backward integration, as well as national economic sovereignty.

“Protecting domestic refining capacity is an urgent national imperative. Reinstating protective measures, supporting local refiners, ensuring policy predictability, and regulating import volumes are 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,” it concluded.