MAN Defends 15 % Import Tariff, Lists Reasons For Its Stand

‘Nigeria is blessed with enormous oil resources. Unfortunately, scarce forex in billions of dollars is still being spent on importing refined petroleum. Supporting local refining capacity through appropriate policy tools will conserve scarce foreign exchange, improve the stability of the Naira, and foster a more favourable macroeconomic environment for investment.’

 Siaka MOMOH

The Manufacturers Association of Nigeria (MAN) has defended the president’s approval of a 15% import tariff on imported petroleum products, despite concerns about its potential impact on everyday citizens.

From all indications the association has brushed aside the fact that the policy will affect people’s income, which may affect the inventories of its members, as it will lead to hikes in transport fares, the price of food, and others, which may have undesirable consequences on the sale of goods produced by MAN member companies.  The policy will also push up the cost of production for its members.

MAN justified its support as follows:

1. Unfettered implementation of the domestic supply of crude as enshrined in the PIA. This will ensure the Naira for crude arrangement that will ensure effective and reliable supply of crude to the local refineries and reduce the pressure on our scarce foreign exchange. It will also attract more investors, including the holders of the 30 refinery licenses, to commit resources in the sector.
2. There is no better path to fixing Nigeria’s economy than protecting local industries, encouraging local patronage, fostering value addition, and promoting industrial development anchored on local content.
3. Nigeria is blessed with enormous oil resources. Unfortunately, scarce forex in billions of dollars is still being spent on importing refined petroleum. Supporting local refining capacity through appropriate policy tools will conserve scarce foreign exchange, improve the stability of the Naira, and foster a more favourable macroeconomic environment for investment.

In view of the above, MAN duly:

1. recognises the importance, significance, and necessity of the approval of the 15% import tariff on petroleum products – petrol and diesel.
2. Acknowledges that the tariff is a rightful, deliberately designed policy instrument intended to protect and encourage domestic producers, curb dumping, and create a stable environment for local refiners to thrive.
3. Notes that the tariff will accelerate operational readiness of domestic refineries, thereby reducing disruptions and stabilising energy supply to industries.

It supports the 15% import tariff as an industrial policy instrument that will:

• Encourage the utilisation of local refining capacity and promote backward integration across the energy value chain.
• Conserve foreign exchange by reducing the nation’s dependence on imported refined petroleum products.
• Strengthen the manufacturing base through a more stable and predictable fuel supply.
• Generate employment opportunities, build technical expertise, and strengthen industrial linkages between refineries and manufacturers.
• Promote local content development and stimulate demand for Nigerian engineering, fabrication and logistics services.
• MAN views this policy as a vital step in achieving energy independence and industrial sustainability, both of which are prerequisites for Nigeria’s economic transformation.

Call for Transparent and Balanced Implementation:

While supporting the 15% tariff imposition, MAN calls for transparent, efficient, and well-coordinated implementation to ensure its benefits reach both industry and consumers, safeguard competitiveness, and prevent unintended cost burdens.

Specifically, MAN calls for:

1. Transparent price monitoring: Government and regulators (PPPRA, NMDPRA, FCCPC) should closely monitor domestic pricing to prevent excessive mark-ups or anti-competitive behaviour.
2. Stable transition period: During the initial months of implementation, the government should support local refiners to ensure adequate fuel availability and prevent supply shocks or speculative hoarding, particularly with the festive period approaching.
3. Reinvestment of tariff revenue: Proceeds from the import duty should be reinvested into energy infrastructure, refinery efficiency, and power support schemes for industries, including credit facilities for industrial energy transition and renewable adoption.
4. SMIs support measures: Provide targeted incentives or rebates for small and medium manufacturers reliant on diesel-powered generators during the transition period.
5. Support the development of more local refineries: The government should create an enabling environment and provide targeted incentives to attract investment in additional modular and conventional refineries, thereby strengthening domestic refining capacity, promoting competition, and ensuring long-term energy security.
6. Ensure stakeholder harmony in the energy sector: The government should foster continuous engagement among refiners, marketers, regulators, and consumers to prevent disputes, ensure policy coherence, and sustain market stability.
7. Move speedily to fully privatize the government-owned refinery, as it is evident that we may never succeed in restoring them to functionality under the current dispensation. Selling off the refineries will stop the commitment of our scarce financial resources to an evidently irredeemable venture.

Conclusion:

MAN acknowledges this major step in the implementation of the Nigeria First policy of the government. We are committed to supporting the Federal Government’s Nigeria First policy direction, especially on local content development and homegrown industrialisation. MAN believes that this tariff will accelerate the country’s journey toward energy sovereignty, industrial competitiveness, and sustainable economic growth — all anchored on the strength of Made-in-Nigeria!