NECA Backs 15% Fuel Import Tariff, Citing Naira Strength and Investment Boost
In a significant endorsement of government policy, the Nigeria Employers’ Consultative Association (NECA) has thrown its weight behind the Federal Government’s decision to impose a 15% import tariff on petrol and diesel, framing the move as a crucial step for economic stabilization and industrial growth.
A Necessary Step for a Crude-Oil Rich Nation
In a statement released from Abuja, NECA’s Director-General, Mr. Adewale-Smatt Oyerinde, addressed the long-standing paradox of a major oil producer remaining dependent on imported refined fuels. “It is absurd for a country blessed with crude oil to spend so many years importing petrol and diesel,” Oyerinde stated, directly linking the situation to the prolonged inactivity of Nigeria’s national refineries.
He described the new tariff not as a mere fiscal adjustment but as a fundamental correction to a structural imbalance. The policy, he argued, is designed to shield and stimulate domestic refining capacity, ultimately strengthening the national currency and making the country more attractive to investors.
Projected Benefits: From Naira Support to Industrialization
Oyerinde outlined a multi-faceted vision for the policy’s impact. “The imposition of the tariff on imported fuel is not only timely but essential,” he asserted. The primary expected outcomes include encouraging local value addition, boosting refining capacity, conserving vital foreign exchange, and providing a firm foundation for Nigeria’s broader industrialization agenda.
He expressed considerable optimism about the potential for economic transformation. “If implemented effectively, this policy will accelerate Nigeria’s journey toward energy sufficiency and economic growth,” Oyerinde predicted. A key mechanism for this growth would be the reduction in demand for foreign exchange used for fuel imports, which would in turn provide substantial support for the Naira’s value.
Reassuring the Private Sector
Beyond macroeconomic benefits, the tariff sends a powerful signal to the business community. Oyerinde emphasized that it offers crucial reassurance to private sector participants who have been hesitant to commit capital. “It will assure local manufacturers and investors in the oil and gas industry that government policies are designed to protect and sustain their investments,” he explained. This confidence, he suggested, is a prerequisite for the large-scale investments needed to revive Nigeria’s refining sector.
A Call for Cautious and Effective Implementation
Despite the strong backing, NECA’s support came with a note of caution. Oyerinde appealed to the government to manage the policy’s rollout with care to avoid unintended negative consequences for citizens and the economy.
He specifically highlighted the need for the government to “establish necessary parameters and manage the dynamics of the policy.” A critical area of focus, he noted, should be the effective handling of the Naira-for-crude arrangement to guarantee a steady supply of crude oil to local refiners.
His concluding remark served as a clear reminder of the policy’s ultimate goal: “A policy meant to promote local refining and ensure regular supplies at the lowest cost should not become a hardship for Nigerians.” Oyerinde urged the government to extend this logic beyond the energy sector, making the promotion of domestic production a central tenet of economic policy to revive the real sector for the long term.
Source: Original reporting from the statement released by the Nigeria Employers’ Consultative Association (NECA).