Some power specialists have expressed concern over the Federal Authorities’s approval of a 15 per cent import responsibility on petrol and diesel, saying it might drive up gasoline costs.
They expressed their considerations in separate interviews with the Information Company of Nigeria (NAN) on Saturday in Lagos.
NAN studies that on Oct. 29, President Bola Tinubu authorised a 15 per cent import tariff on petrol and diesel, a coverage anticipated to boost the touchdown price of imported gasoline.
The specialists mentioned that the transfer may translate into greater pump costs for shoppers, with some estimating a rise of as much as N150 per litre or extra.
Dr Ayodele Oni, Companion and Chair of the Power and Pure Sources Observe Group, Bloomfield Legislation Observe, mentioned the coverage, although geared toward defending native refining, may worsen inflation and cost-of-living pressures.
“The imposition of a 15 per cent responsibility will enhance the touchdown price of imported gasoline, and this extra price shall be handed on to shoppers.
“In a deregulated economic system like Nigeria’s, the place costs are decided by market forces, there’s a robust chance of worth volatility.” Oni defined.
Oni famous that the federal government’s said aims for the coverage embrace strengthening nationwide power safety, supporting home refining capability, and guaranteeing aggressive market stability.
“By making imported gasoline costlier, native refineries will change into extra aggressive.
“This could, in concept, encourage home manufacturing and scale back dependence on imported gasoline,” he mentioned.
Nevertheless, he warned that with out enough infrastructure and operational refineries, the coverage may backfire, leading to gasoline shortage and black-market actions.
“If native refining capability stays weak, this responsibility may disrupt provide, as over 60 per cent of Nigeria’s gasoline continues to be imported.
“The federal government should again this coverage with infrastructural assist, refinery rehabilitation, and environment friendly logistics to forestall shortage,” Oni added.
Oni additionally emphasised that the elevated responsibility would increase operational prices for importers and entrepreneurs, affecting competitors and liquidity inside the downstream sector.
“This coverage may push out smaller unbiased entrepreneurs who could also be unable to fulfill the brand new price necessities, leaving the market dominated by bigger gamers,” he mentioned.
Instead, Oni suggested the federal government to incentivise native refining by tax holidays, duty-free importation of refining gear, and infrastructure funding quite than imposing heavy tariffs on imports.
In the meantime, the Petroleum Merchandise Retail Retailers House owners Affiliation of Nigeria (PETROAN), nonetheless, lauded the choice, describing it as a step towards reaching power safety and sustainable native refining.
Its nationwide president, Dr Billy Harry, counseled President Bola Tinubu for approving the responsibility, saying it could encourage funding in home refining and stabilise the downstream sector.
“This coverage will enhance native refining capability, increase the economic system, create jobs, and strengthen the Naira.
“Whereas there could also be short-term challenges akin to worth hikes and job losses within the import sector, the long-term advantages outweigh the disadvantages,” Harry mentioned.
He urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to make sure that native refineries are correctly regulated to forestall monopolistic tendencies.
“We should guard in opposition to a scenario the place a number of refineries dominate the market. Monopoly may defeat the aim of this coverage,” he famous.
He additionally appealed to the Nigerian Nationwide Petroleum Firm Ltd (NNPC Ltd) to ensure an enough crude oil provide to native refineries to make sure constant manufacturing and stop shortage.
A downstream operator who most popular anonymity raised questions concerning the present state of native refining and transparency within the sector.
“The federal government has supported native refineries by tax incentives and crude provide in naira, however the price of domestically refined merchandise stays greater than imported gasoline.
“Earlier than imposing such tariffs, there ought to be full transparency about manufacturing ranges, price constructions, and refinery effectivity,” the supply mentioned.
He cautioned that with out clear knowledge and accountability, the 15 per cent responsibility may worsen the scenario by elevating each native and imported gasoline costs concurrently.
“If imports change into costlier and native refineries can not meet demand, the end result shall be greater costs and shortage,” he mentioned.
He urged the federal government to critically assess the timing of the coverage and make sure that refinery operations had been able to assembly nationwide gasoline demand earlier than implementing the responsibility.
“Supporting native manufacturing isn’t dangerous, however it should be backed by transparency and lifelike planning,” he added.
Based on him, whereas the 15 per cent import responsibility goals to stimulate native refining and scale back dependence on imports, its success will rely on transparency, infrastructure, and efficient regulation. (NAN)
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