Market News

By Merit Ibe

 Lagos Chamber of Commerce and Industry has urged the Federal Government to postpone the implementation of the 15% tax on petrol and diesel, calling for empowerment of local refiners through crude-for-naira supply chain that ensures sufficient crude.

The chamber viewed that with local capacity not yet established, this tax will increase the cost of fuels as long as imports continue, noting that the government needs to address the inhibiting factors against local production and refining before imposing this levy to discourage imports and support local production.

Director General of the chamber, Chinyere Almona explained that when the local refiners are empowered, they can boost their refining capacity with a stable supply of crude and adequately meet domestic demand at competitive rates.

“At this point, the imposition of an import tax will directly discourage importation and boost demand for the locally refined products. With zero importation achieved, the benefits will be seen in the creation of jobs, the conservation of FOREX, a strengthened exchange rate, and increased revenue for the government.”

Almona acknowledged that the tax policy is aimed at curbing import dependence and promoting local refining capacity, she however, expressed concern about the current adequacy of local refining capacity to meet national demand.

While this policy direction aligns with the nation’s long-term objective of achieving energy self-sufficiency and strengthening the naira, the Chamber emphasized the importance of a measured, strategic rollout to ensure a sustainable economic impact.

“Nigeria is already experiencing cost-of-living pressures, supply-chain, and inflation challenges. The business community will be sensitive to further cost shocks. Increased fuel costs affect transportation, supply chains, agriculture, logistics, and manufacturing – this, in turn, disproportionately impacts SMEs and trading firms.”

According to the chamber, a comprehensive framework for crude oil supply to these refineries in Naira rather than foreign exchange will significantly enhance cost efficiency, stabilize production, and strengthen the local value chain.

Almona viewed that while the policy direction aligns with the nation’s long-term objective of achieving energy self-sufficiency and strengthening the naira, she emphasized the importance of a measured, strategic rollout to ensure a sustainable economic impact.

“Discouraging fuel importation is a necessary step towards achieving domestic energy security, stimulating investment in local refineries, and deepening the downstream petroleum value chain.

“However, a premature restriction on imports, without sufficient domestic production, could lead to supply shortages, higher pump prices, and inflationary pressures across critical sectors.

“Our interest lies in a diversified downstream sector where multiple refineries, modular plants, and logistics firms thrive. A level playing field and transparency are key.”

Furthermore, the chamber urged the Government to resolve outstanding labour union issues and create an enabling environment that fosters industrial harmony and private sector confidence.

“Ensuring clarity, consistency, and transparency in the implementation of the new tax regime will be crucial in preventing market distortions and sustaining investor trust.

“While the reform is justified from an industrial policy standpoint, its success depends on practical implementation, robust safeguards, and parallel reforms to alleviate cost burdens on businesses and consumers. “With local capacity not yet established, this tax will increase the cost of fuels as long as imports continue. The government needs to address the inhibiting factors against local production and refining before imposing this levy to discourage imports and support local production.

“We recommend that the implementation of this tax policy be postponed and that, during the transition period, the government demonstrates its commitment through action by empowering local refiners through an efficient crude-for-Naira supply chain that ensures sufficient crude.”

“We look forward to working together in a spirit of partnership and shared national interest.”