The Nigeria Employers’ Consultative Association (NECA) has expressed support for the proposed 15% fuel import tariff, citing its potential to enhance local production of petroleum products. According to NECA Director General, Wale Smatt Oyerinde, the policy is a step in the right direction, as it will encourage the development of local refining capabilities.
Oyerinde emphasized that the tariff should only apply to imported petroleum products, not those produced locally. He noted that even developed nations like the United States are implementing protectionist policies to safeguard their local industries, and Nigeria should follow suit. The NECA boss argued that the country has no excuse not to protect its own industries, particularly given the collapse of its four refineries.
The Federal Government had approved the 15% tariff increase, mandating its enforcement by the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority. While some critics have argued that the move will lead to an increase in the landing cost of petroleum products, NECA believes that the benefits of the policy outweigh the potential drawbacks.
Oyerinde suggested that similar policies should be extended to other areas, such as the manufacturing and real sectors, to ramp up local production and reduce dependence on imports. He emphasized the need to prioritize local production and reduce the tendency to import goods that can be produced domestically, citing the negative impact of imports on foreign exchange and other aspects of the economy.
The NECA director general noted that the organization is looking beyond petroleum products, analyzing the potential benefits of extending the tariff policy to other sectors. He proposed that import duties should be applied to all goods that can be produced locally, provided that sufficient arrangements are made to meet domestic needs. Oyerinde suggested that a moratorium of one to two years could be granted to businesses to integrate backward and increase local production capacity.
The proposed 15% fuel import tariff is a significant development in Nigeria’s efforts to revitalize its refining sector and reduce dependence on imported petroleum products. As the country moves forward with the policy, it remains to be seen how it will impact the economy and the local refining industry.
