The Independent Petroleum Marketers Association of Nigeria (IPMAN), one of the groups in the downstream market of the petroleum industry, has expressed serious concern about the latest imposition of 15% import duty on refined fuel and diesel by the government, saying that the implementation of the tariff will lead to surge in prices of petroleum products.
The association alleged that with the latest fiscal regime on the major imported refined petroleum products, the government was making it difficult for marketers, who are importing petroleum products to make up for the shortfall from the local refiners, since they are not producing enough to meet local demand.
An online medium, Nairametrics, quoted the Publicity Secretary of the IPMAN, Mr. Chinedu Ukadike, as urging the government not to use policy to favour some industry players against the majority of the oil marketers.
According to him, the high prices of petroleum products coupled with the introduction of CNG and electric vehicles, will lead to some of the filling stations going obsolete.
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Specifically, the IPMAN spokesperson said: “This is going to increase the price of petroleum products at the pump. All we’re clamoring for is to see a reduced price with low capital and also return on investment, whereby commuters can be able to use PMS as a source of energy.
“We have also seen serious investment in CNG and electric vehicles and with this, some of our filling stations will go obsolete. So, anything that can encourage downward prices is appreciated by marketers”, Ukadike added.
Speaking on the association’s alleged protection of local refiners by the government, he pointed out that “in a deregulated economy, you don’t regulate to favor other industry players. What you allow is demand and supply, and the forces of the markets to determine price.
“You don’t use a price increase to twist the hands of other competitors who might be challenging in terms of pricing. In as much as we encourage indigenous refiners, we also encourage lower pricing. You know, when you go to buy rice, sometimes you see local rice is even becoming more expensive than foreign rice.
“We don’t have enough local refiners. Dangote is not producing sufficiently. So, why are we now making it difficult for people who are bringing in products to compete? What governments should do is to remove unnecessary taxations on those trying to build a refinery and trying to acquire licenses.
“Remove some of these bottlenecks and encourage other local refiners with funding so that there will be serious competition that will lead to price reduction”, Ukadike stressed.
It would be recalled that President Bola Tinubu had last week approved a 15% ad-valorem import duty on diesel and petrol, following a request by the Federal Inland Revenue Service (FIRS) on the need to apply the duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel to align import costs with domestic realities.
The FIRS Chairman, Dr. Zacch Adedeji, in his memo to the President, stated that the measure was part of ongoing reforms to boost local refining, ensure price stability, and strengthen the naira-based oil economy in line with the administration’s agenda for energy security and fiscal sustainability.
As expected, the tariff measure has been eliciting mixed reactions from the public, with some economic experts, including the Director/Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr, Muda Yusuf, describing the measure as desirable for improving the nation’s local petroleum products refining capacity and foreign exchange accruals to the economy.
