The Federal Government’s decision to impose a 15 per cent import duty on petrol and diesel, purportedly to protect local refineries has once again ignited concern over its grasp of Nigeria’s energy realities. While the stated intent of encouraging domestic refining and reducing import dependence is laudable, the timing and context raise troubling questions.
The Nigerian economy is still reeling from subsidy removal, currency depreciation, and a stubbornly high cost of living. Transport fares have doubled, small businesses are suffocating under the weight of energy costs, and inflation; though recently eased to 18 per cent remains one of the highest in Africa. Against this backdrop, the new duty looks less like industrial policy and more like a fresh tax on suffering citizens.
Policymakers claim the tariff will create a level playing field for local refineries, especially the privately owned Dangote Refinery and smaller modular plants. But protectionism in the downstream sector must not translate into consumer punishment. Nigeria’s refining capacity is still embryonic; none of the local plants currently meets national demand. Until reliable, affordable supply is guaranteed domestically, an import duty risks driving pump prices higher and triggering another inflationary spiral.
Experience has shown that government intervention in the oil sector often benefits rent seekers more than producers or consumers. The country’s four moribund state refineries have swallowed trillions of naira with nothing to show. If Abuja genuinely seeks energy independence, it should focus on transparent deregulation, robust regulatory oversight, and enabling infrastructure; not arbitrary levies that enrich middlemen.
Moreover, the policy sends mixed signals to investors. On one hand, the government preaches free-market principles and removal of subsidies; on the other, it erects tariff barriers that distort competition. Investors crave consistency, not policy somersaults dressed as reform.
The government must tread carefully. Rather than adding to Nigerians’ misery, it should prioritise stable electricity, efficient transport, and reliable refining capacity before introducing fresh costs into the fuel supply chain. Otherwise, this 15 per cent duty will go down as another ill-conceived policy that punishes the masses while rewarding a few powerful interests.
