The Nigerian government’s recent suspension of a 15% import duty on premium motor spirit and automotive gas oil has been welcomed by the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN. According to PENGASSAN’s President, Festus Osifo, the implementation of this duty would have resulted in a significant increase in fuel costs, with prices potentially rising by at least N130.

In an interview on Arise Television, Osifo revealed that the suspension of the import duty was not coincidental, but rather the result of efforts by the Trade Union Congress, TUC, to prevent the added financial burden on consumers. With local refineries currently meeting only 40% of Nigeria’s daily fuel demand, the import duty would have led to a substantial increase in fuel prices, as local producers would have also reviewed their prices upward.

The Nigerian government’s decision to suspend the import duty has averted a potential crisis, as the country’s fuel prices are already a significant concern for many citizens. The suspension is expected to provide relief to consumers, who would have borne the brunt of the increased costs. PENGASSAN’s statement highlights the need for the government to focus on increasing local refining capacity to reduce the country’s reliance on imported fuel and mitigate the impact of external factors on fuel prices.

The development comes as Nigeria continues to grapple with the challenges of meeting its fuel demands, with the country’s refineries operating below capacity. The government has been working to revamp the refining sector, with plans to increase capacity and reduce reliance on imports. However, the process has been slow, and the country remains heavily dependent on imported fuel.

The suspension of the import duty is a temporary measure, and the government will need to address the underlying issues in the refining sector to ensure a stable and sustainable fuel supply. PENGASSAN’s comments emphasize the need for a comprehensive approach to addressing the country’s fuel challenges, including increasing local refining capacity and reducing dependence on imports.