MAN Tasks FG on Productive Use of Fuel Tariffs to Drive Industrial Growth

The Manufacturers Association of Nigeria (MAN) has urged the Federal Government to ensure that revenue generated from the recently introduced 15 percent fuel import tariff is strategically utilised to boost industrial productivity, support infrastructure development, and strengthen the manufacturing sector. The association said that such an approach would help cushion the potential impact of the policy on production costs and consumer prices while driving sustainable economic growth.

In a statement released in Lagos, MAN President, Otunba Francis Meshioye, emphasised that while the association recognises the government’s fiscal reform efforts aimed at increasing non-oil revenue and encouraging local refining, it is imperative that proceeds from fuel tariffs be channelled into projects that directly benefit productive sectors of the economy. He noted that the manufacturing industry, already burdened by rising energy costs, exchange rate volatility, and logistics challenges, requires strong policy support to remain competitive.

“We understand the rationale behind the introduction of the fuel import tariff, especially in the context of fiscal reforms and the drive for self-sufficiency in refining. However, it is crucial that the funds generated are transparently managed and reinvested into critical infrastructure that supports production — such as power, transport, and industrial parks,” Meshioye said.

According to MAN, the implementation of the fuel import tariff must not become a revenue tool without corresponding investment in productive capacity. The association argued that without targeted interventions, the tariff could further strain manufacturing operations by increasing operational costs, especially for energy-dependent industries.

Meshioye called on the Federal Government to design a framework that ensures part of the tariff revenue is channelled into initiatives that lower production costs and enhance local value addition. He suggested that the funds could be used to develop renewable energy projects for industrial zones, rehabilitate transport networks, and support credit facilities for small and medium-scale manufacturers.

He also warned that if the tariff proceeds are not properly managed, it could negate the government’s industrialisation agenda and deepen inflationary pressures. “We cannot afford to see the 15 percent fuel import tariff result in higher energy and logistics costs for industries without any compensating infrastructure investment. That would be counterproductive,” he stated.

MAN further urged the government to strengthen dialogue with the private sector to ensure that fiscal policies are harmonised with industrial development strategies. The association stressed that consistent stakeholder engagement would help avert policy missteps and ensure a fair balance between government revenue needs and business sustainability.

Economists have also weighed in on the issue, describing the 15 percent fuel import tariff as a double-edged policy. Dr. Uche Okeke, a Lagos-based economist, noted that while the tariff could encourage local refining and reduce import dependency, it also risks driving up inflation and production costs in the short term. “The key to success lies in how the proceeds are spent. If used to build refineries, roads, and power infrastructure, the policy could eventually lower costs across the economy. But if mismanaged, it will worsen the burden on industries and consumers,” Okeke explained.

Industry observers noted that the manufacturing sector has long struggled with the high cost of energy, which accounts for over 40 percent of total production expenses in some subsectors. The recent fuel tariff, they said, could further impact competitiveness unless the government implements mitigating measures such as energy subsidies for manufacturers or tax incentives for industries adopting cleaner production technologies.

Meshioye also highlighted the importance of complementing the tariff policy with robust energy and transport reforms. “Manufacturers are currently paying heavily for power and logistics. If we have stable electricity and efficient transport networks, the effect of fuel tariff increases can be absorbed. What we need is a holistic approach to policy implementation,” he added.

The MAN president urged the government to expedite the operational readiness of local refineries, particularly the Dangote Refinery and those under rehabilitation by the Nigerian National Petroleum Company Limited (NNPCL), to reduce dependence on imported fuel. He said increased local refining capacity would help stabilise prices and ensure energy security for industrial operations.

Similarly, the association called for transparent reporting on the collection and utilisation of tariff revenues. “Transparency is key to building trust. Manufacturers want to see a clear link between what is collected from fuel imports and how it is used to develop critical sectors. If people can see tangible outcomes — such as improved electricity, better roads, and modern ports — they will support the policy,” Meshioye said.

The association also proposed that a portion of the tariff revenue be allocated to a dedicated Industrial Support Fund to provide concessional loans to manufacturers investing in renewable energy and energy-efficient technologies. According to MAN, such initiatives would reduce dependence on fossil fuels and align with Nigeria’s transition to a low-carbon economy.

Meanwhile, some industry players have expressed optimism that the new tariff could stimulate the local refining sector and create investment opportunities in downstream industries. They, however, cautioned that the policy’s benefits would take time to materialise and would depend on the efficiency of its implementation.

In recent months, the Federal Government has defended the 15 percent fuel import tariff as part of broader fiscal measures aimed at promoting local refining, diversifying revenue sources, and supporting infrastructure development. The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said the policy aligns with President Bola Tinubu’s economic reform agenda and will ultimately strengthen Nigeria’s self-sufficiency in fuel production.

However, MAN insisted that the government must take deliberate steps to prevent the policy from becoming a burden on productive sectors. “The manufacturing sector is the engine of economic growth and job creation. Any policy that affects energy pricing or logistics should be carefully implemented with feedback from the industry. Otherwise, we risk undermining our competitiveness,” Meshioye cautioned.

He reaffirmed MAN’s readiness to work with the Federal Government in ensuring that the fuel tariff policy contributes to national development goals rather than stifling production. “Our position is clear — we are not against reform. We only insist that such reforms should be growth-oriented, transparent, and inclusive,” he concluded.