The Nigeria Employers’ Consultative Association (NECA) has thrown its weight behind Federal Government’s imposition of 15% import tariff on petroleum products, calling it an appropriate and necessary measure to protect and encourage local refining.
Adewale-Smatt Oyerinde, the director-general of NECA, who offered an explanation on the new tariff, said heavy reliance on imported petroleum products was unacceptable in an oil-producing nation like Nigeria.
“It is absurd for a country blessed with crude oil to spend so many years importing petrol and diesel. The comatose state of the four refineries in the country can be partly attributed to the ongoing importation of these products, which the refineries could produce. The imposition of the tariff on imported fuel is not only timely but essential.”
He emphasised that “this policy is a significant step toward promoting local value addition, strengthening domestic refining capabilities, conserving foreign exchange (FOREX), and advancing Nigeria’s industrialization plans.”
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The DG further stated, “To expedite economic recovery, promote local production, strengthen the Naira, and attract investors, the Government must demonstrate commitment and confidence in local production.
“If implemented effectively, this policy will accelerate Nigeria’s challenging journey toward energy sufficiency and economic development. It will also provide the naira with some breathing room, allowing pressure on FOREX for imports to be redirected toward other critical needs. Moreover, this initiative will assure genuine local manufacturers and investors in the oil and gas industry that the government is committed to supporting their investments with policies that protect them and ensure the sector’s sustained development.”
The NECA DG noted that the government must take the necessary steps to ensure the policy does not backfire. He stated, “The government must establish all necessary parameters and manage the dynamics of the policy to prevent price distortions and other negative consequences.
It is crucial to resolve the complexities of the naira-for-crude arrangement to guarantee an effective and regular supply of crude to local refiners. This and other related issues must be addressed promptly to prevent the policy from becoming counterproductive. A policy designed to promote local refining and ensure regular supplies at the lowest possible price should not become a burden for Nigerians.
“The task of promoting local production of goods, not only in the oil and gas sector should be paramount and take priority space in government’s policy. This will also help the resuscitation of the real sector in the medium and long term”
