Nigeria is abandoning plans to impose a 15% duty on imported refined petroleum products, which is a blow to its new private domestic refinery of billionaire Aliko Dangote.
“The implementation of the 15 per cent ad-valorem import duty on imported Premium Motor Spirit and Diesel is no longer in view,” the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said on Thursday in a statement advising against “panic buying of any petroleum product.”
There is an adequate supply of petroleum products in Nigeria, the authority added.
The 15% import duty was approved a month ago by Nigerian President Bola Tinubu and was planned to take effect from November 21.
The levy was initially intended to support domestic refineries in Nigeria. The import duty would have ensured that imported gasoline is not cheaper than the gasoline from the Dangote refinery, which produces all of Nigeria’s domestic gasoline supply as state-owned refineries are idled awaiting repairs.
The biggest refinery in Africa, the Dangote plant in Nigeria, had welcomed the import duty, but the association of fuel importers had warned that the levy would raise local gasoline and diesel prices.
However, the authority now says the plan to impose the duty is scrapped.
But gasoline markets in Africa and nearby regions have tightened as the Dangote plant has slashed crude oil purchases in recent weeks amid operational challenges.
The gasoline unit at the plant has been a substantial supplier of the fuel in Nigeria and abroad since it began operations last year. However, issues at the refinery, including operational setbacks, unplanned outages, a strike, and suspected sabotages by workers amid restructuring, have crippled gasoline output in recent months.
Early this month, the Dangote refinery said that its gasoline and diesel production now exceeds local demand.
“This significant production capacity not only guarantees local supply, but also enhances energy security and reduces dependence on imports,” Anthony Chiejina, a spokesman for the Dangote Group, said in a statement on November 1, as carried by Bloomberg.
By Charles Kennedy for Oilprice.com
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