Some energy experts have expressed concern over the Federal Government’s approval of a 15 per cent import duty on petrol and diesel, saying it may drive up fuel prices.

They expressed their concerns in separate interviews on Saturday in Lagos.

On October 29, President Bola Tinubu approved a 15 per cent import tariff on petrol and diesel, a policy expected to raise the landing cost of imported fuel.

The experts said that the move could ranslate into higher pump prices for consumers, with some estimating an increase of up to N150 per litre or more.

Dr Ayodele Oni, Partner and Chair of the Energy and Natural Resources Practice Group, Bloomfield Law Practice, said the policy, though aimed at protecting local refining, could worsen inflation and cost-of-living pressures.

“The imposition of a 15 per cent duty will increase the landing cost of imported fuel, and this additional cost will be passed on to consumers.

“In a deregulated economy like Nigeria’s, where prices are determined by market forces, there’s a strong possibility of price volatility.” Oni explained.

Oni noted that the government’s stated objectives for the policy include strengthening national energy security, supporting domestic refining capacity, and ensuring competitive market stability.

“By making imported fuel more expensive, local refineries will become more competitive.

“This should, in theory, encourage domestic production and reduce dependence on imported fuel,” he said.

However, he warned that without adequate infrastructure and operational refineries, the policy could backfire, resulting in fuel scarcity and black-market activities.

“If local refining capacity remains weak, this duty could disrupt supply, as over 60 per cent of Nigeria’s fuel is still imported.

“The government must back this policy with infrastructural support, refinery rehabilitation, and efficient logistics to prevent scarcity,” Oni added.

Oni also emphasised that the increased duty would raise operational costs for importers and marketers, affecting competition and liquidity within the downstream sector.

“This policy could push out smaller independent marketers who may be unable to meet the new cost requirements, leaving the market dominated by larger players,” he said.

As an alternative, Oni advised the government to incentivise local refining through tax holidays, duty-free importation of refining equipment, and infrastructure investment rather than imposing heavy tariffs on imports.

Meanwhile, Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), however, lauded th decision, describing it as a step toward achieving energy security and sustainable local refining.

Its national president, Dr Billy Harry, commended President Bola Tinubu for approving the duty, saying it would encourage investment in domestic refining and stabilise the downstream sector.

“This policy will increase local refining capacity, boost the economy, create jobs, and strengthen the Naira

“While there may be short-term challenges such as price hikes and job losses in the import sector, the long-term benefits outweigh the disadvantages” Harry said.

He urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure that local refineries are properly regulated to prevent monopolistic tendencies.

“We must guard against a situation where a few refineries dominate the market. Monopoly could defeat the purpose of this policy,” he noted.

He also appealed to the Nigerian National Petroleum Company Ltd. (NNPC Ltd.) to guarantee adequate crude oil supply to local refineries to ensure consistent production and prevent scarcity.

A downstream operator who preferred anonymity raised questions about the current state of local refining and transparency in the sector.

“The government has supported local refineries through tax incentives and crude supply in naira, but the cost of locally refined products remains higher than imported fuel.

“Before imposing such tariffs, there should be full transparency about production levels, cost structures, and refinery efficiency,” the source said.

He cautioned that without clear data and accountability, the 15 per cent duty could worsen the situation by raising both local and imported fuel prices simultaneously.

“If imports become more expensive and local refineries can not meet demand, the outcome will be higher prices and scarcity,” he said.

He urged the government to critically assess the timing of the policy and ensure that refinery operations were capable of meeting national fuel demand before implementing the duty.

“Supporting local manufacturing isn’t bad, but it must be backed by transparency and realistic planning,” he added.

Accorilding to him, while the 15 per cent import duty aims to stimulate local refining and reduce dependence on imports, its success will depend on transparency, infrastructure, and effective regulation.

The Ministry of Petroleum Resources and its two agencies have jointly opposed the bill to establish the National Commission for the Decommissioning of Oil and Gas Installations (NC-DOGI), 2024.

The agencies are the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian National Petroleum Company Limited (NNPC Ltd.)

A statement in Abuja by Eniola Akinkuotu, Head, Corporate Communications and Media, NUPRC said that the position was delivered at a public hearing organised by the House of Representatives Committee on Petroleum Resources (Upstream).

In his submission, the Minister of State for Petroleum Resources, Dr Heineken Lokpobiri, said contrary to assumptions by the lawmakers, creating a Commission for decommissioning and abandonment would not address any community issues as these were already being taken care of.

Lokpobiri said the issues were taken care of by the Host Community Development Trust Fund (HCDT), which had generated nearly N400 billion for community development projects.

He said that Nigeria had been recording new Final Investment Decisions (FIDs) and witnessing renewed activities in upstream, midstream, and downstream operations, developments that were stagnant for over a decade before the Renewed Hope administration of President Bola Tinubu.

He, therefore, said that the creation of the NC-DOGI risked scaring away investors.

The minister also said that creating a new agency to handle decommissioning and abandonment would duplicate the responsibility already vested in the NUPRC as provided by Sections 232 and 233 of the Petroleum Industry Act (PIA) 2021.

He advised the committee to step down the bill, citing that a predictable and stable legal framework attracts investors.

In his presentation, the Commission’s Chief Executive, NUPRC, Mr Gbenga Komolafe said creating a different Commission to handle decommissioning and abandonment did not align with global best practices, where they were domiciled with the upstream regulator.

The CCE said the issue of decommissioning was not a stand-alone affair and would lead to having a separate regulator dealing with Field Development Plan (FDP) and a different agency handling decommissioning and abandonment.

“This will make the NUPRC not to have full line of sight on the FDP as decommissioning and abonnement is an integral part of any FDP and will jeopardise the intended objective of the development plan.” he added.

He said that between 2014 and 2021, Capital expenditure for oil and gas investment declined by about 75 per cent due to lack of a stable legal and regulatory framework until the emergence of the PIA.

The CCE aligned with the position of the Minister and stated that Nigeria has now put in place the PIA, tinkering with it will send wrong signals to the international community.

“ Creating such will show that we have again started to create an unstable framework which will be a disincentive to the investments.”

The Executive Vice-President, Upstream, NNPC, Mr Udobong Ntia, agreed with the minister and the CCE that there was no need for the establishment of a new agency.

Ntia said that decommissioning and abandonment were not a regular exercise but an activity that could take place at the end of the life of a field which could take years.

“What will such a commission be doing when the NNPC, for instance, has no decommissioning and abandonment until 2045?” he asked.

Earlier, the Chairman, House Committee on Petroleum Resources, (Upstream), Mr Alhassan Doguwa, said that the bill was conceived in order to address local environmental issues and challenges within oil producing communities.