Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, has urged the Federal government to exercise caution over its 15 per cent import tax on petrol and diesel, noting that the country is already battling cost-of-living pressures, supply-chain and inflation challenges and the business community will be sensitive to further cost shocks.
Stressing that businesses cannot bear any further increases of any kind, she said the slightest increase in fuel costs will affect transportation, supply chains, agriculture, logistics and manufacturing, which will in turn, disproportionately impact MSMEs and trading firms.
While acknowledging that the tax move is aimed at curbing import dependence and promoting local refining capacity, she said this aligned with the nation’s long-term objective of achieving energy self-sufficiency and strengthening the Naira.
As such, she said there is a need to apply caution and ensure a measured, strategic rollout to ensure a manageable and sustainable economic impact.
“The Chamber recognises that 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, we must question and express concern about the current adequacy of local refining capacity to meet national demand. A premature restriction on imports, without sufficient domestic production, could lead to supply shortages, higher pump prices, and inflationary pressures across critical sectors,” she said.
She called on the Federal government to prioritise the full operationalisation and optimisation of local refineries, both public and private, including modular refineries and the recently revitalised major refining facilities.
A comprehensive framework for crude oil supply to these refineries in Naira rather than foreign exchange will significantly enhance cost efficiency, stabilise production and strengthen the local value chain.
“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,” she stressed.
Further, she urged the Federal 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, she said.
Noting that while the reform is justified from an industrial policy standpoint, she said its success depends on practical implementation, robust safeguards and parallel reforms to alleviate cost burdens on businesses and consumers.
Adding that local capacity is yet established, she said this tax will increase the cost of fuels as long as imports continue. She urged the government to urgently 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. With this, refiners 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 FX, a strengthened exchange rate and increased revenue for the government.”
