Advisors Reports - 1
15% FUEL TARIFF THREATENS TO PUSH PETROL PRICE TO N1,000/LITRE, WARNS MEMAN
GREATRIBUNETVNEWS–THE Major Energy Marketers Association of Nigeria (MEMAN) has sounded the alarm on the proposed 15% import tariff on petrol and diesel, warning of devastating consequences for consumers and businesses. Here are the key issues:
– Petrol Price Surge: Petrol price could hit N1,000 per litre in Lagos and over N1,020 in inland cities.
– Diesel Price Increase: Diesel price may rise to N1,164-N1,194 per litre, driving up logistics costs and food prices.
– Impact on Small Businesse: Small businesses, already struggling with inflation, will feel the pinch.
– Regressive Policy : The policy is deemed “potentially regressive”, disproportionately affecting low-income earners and small businesses.
– Transparency and Accountability: MEMAN urges the Federal Government to ensure transparency and accountability in fuel pricing.
– Economic Hardship: The tariff could exacerbate economic hardship, deepening the struggles of Nigerians
“Government should publish open-market price computations and end-user prices regularly so that Nigerians can see what drives pump costs,” he said.
Explaining the economics behind the policy, Isong noted that while the tariff was designed to help local refiners recover costs and compete globally, it would also increase the landed cost of imported fuel.
“Ultimately, importers will pass these additional costs to consumers,” he said.
He warned that such cost transfer could destabilise the market.
“If prices rise sharply, smaller importers may be squeezed out, leaving only a few dominant players,” he said.
Isong, therefore, called for strong regulatory oversight.
“The Nigerian Midstream and Downstream Petroleum Regulatory Authority must be vigilant to ensure fair competition and nationwide product availability,” he said.
He proposed alternatives that could achieve the same policy goals without hurting consumers.
“Government can adopt a phased or conditional tariff tied to verified increases in domestic refining capacity,” he said.
Isong also recommended tariff caps to cushion impact.
“A fixed cap of N50 per litre or $20 per metric tonne could limit the burden on ordinary Nigerians,” he said.
He emphasised the need for market transparency.
“A competitive framework with standardised pricing and regular publication of international and local refining benchmarks will promote fairness,” he said.
The MEMAN boss further urged reforms in border and customs operations.
“Enhanced anti-smuggling measures and tighter customs checks will prevent tariff evasion and protect local investments,” he said.
Isong added that proactive exchange rate management could serve as natural protection for local refiners.
“An undervalued Naira can make imports more expensive and domestic production more attractive,” he explained.
Also, S&P Global analysts, Mr Dumdisi Awanen and Ms Tanya Stepanova, said that “Nigeria must balance refinery protection with competition to ensure stable fuel prices and a sustainable energy market.”
Meanwhile, S&P Global Commodity Insights analysts, Mr Dumdisi Awanen and Tanya Stepanova, presented a paper titled “Navigating Transformation: Lessons from Global Markets for Nigeria’s Energy Future”.
Their analysis showed that Nigeria remains a pioneer in fuel market liberalisation in Africa but still requires strong regulatory oversight to ensure fair competition and prevent monopolies.
Using case studies from Ghana, Zambia, Morocco, and South Africa, the report highlighted how excessive protectionist policies can distort markets, while transparent regulation and open-access systems promote competition and price stability.
In Ghana, for instance, the National Petroleum Authority (NPA) sets indicative maximum and minimum pump prices to protect consumers while allowing fair margins for marketers.
“Zambia’s open-access TAZAMA pipeline system, introduced in 2025, has also helped lower diesel prices by encouraging competition among transporters.
The S&P Global team emphasised that striking the right balance between supporting Nigeria’s emerging refining sector, led by the Dangote Refinery and others, and maintaining market competition would be crucial for sustainable energy development.
According to them, while Dangote’s ex-refinery prices are currently lower than import parity prices when logistics are considered, continued transparency and fair regulation are needed to prevent market dominance and ensure that liberalisation benefits all stakeholders.
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