Manufacturers Kick Against N5 Fuel Levy

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The President of Manufacturing Association of Nigeria (MAN) Dr Frank Jacobs says the spiral effect of the proposed five Naira levy on imported petroleum products will be “unprecedented” on the economy.

The Senate Committee had recommended a five Naira levy, chargeable per litre, on imported petrol and diesel products and on other non-locally refined petroleum products.

The levy is expected to be used to fund roads projects, and maintenance in the country.

Jacob disclosed that though MAN was yet to officially meet over the issue, the proposal was not bad in its entirety.

The president however said the proposal was ill-timed and that the lawmakers should reconsider the appropriateness of the timing of the bill and the choice of products like PMS and diesel.


He noted that its implementation would drive up inflation, further erode the purchasing power of Nigerians and frustrate the growth of the manufacturing sector.


“On the face value, the five Naira levy appears harmless but a critical examination of the transmission mechanism of its economic and political implications revealed enormous resultant challenges

“This is not because the bill is not well taught out but the timing seems inappropriate in view of the prevailing economic circumstance of the country.

“The spiral effect of a levy of five Naira on every litre of fuel imported into the country on the economy, especially in this time and season will be unprecedented,” he said.

According to him the economy is still in the negative growth region and currently on a journey out of recession.

“Capacity utilisation is a little above 50 per cent, cost of production is pretty on the high side with expenses on self-generated power using diesel responsible for about 36 per cent of the total cost profile.

“Interest rate is still hovering around the 28 to 30 per cent mark and inflation is still double digit oscillating within the 17 percentile range.

“The introduction of the five Naira levy will erode the purchasing power of Nigerians and trigger high inventory of unsold manufactured products,” he said.

The Abuja Chamber of Commerce and Industry (ACCI) also did not support the proposal.

President of the ACCI, Mr Tony Ejinkeonye , said it will worsen the plight of the masses.

Ejinkeonye submitted that the proposal, if implemented, would cause untold hardship on people.

The president agreed that budgetary allocations were not enough to fund road infrastructure in the country.

He said though several federal roads across the country were in very bad shape but imposing five Naira levy was not the right approach.

He said: “this levy should not be imposed now as Nigerians are already encumbered with lots of burden.

“This levy if imposed will worsen the plight of the masses because fuel plays a vital role in the life of an average Nigerian.

“Thus, any increase in the price of fuel which the levy will create, will have adverse implications on all other sectors of national life.

“It will lead to sharp increase in cost of transportation, food and other services that depend on fuel for running.

“And, Its multiplier effect would have grave implication for the economy and worsen the inflation rate”.

He said that the fuel levy no doubt would be exploitative and burdensome, therefore, government should spare the citizens the suffering that this fuel levy will impose’

He advised the government to look at other ways of saving money for roads infrastructure such as the reduction of corruption, as well as cut in the cost of running government.

Also, the President National Association of Nigerian Traders (NANTS) Mr Ken Ukaoha said though the idea was good but the timing was also wrong.

Ukaoha said that the nation was in crisis of economic recession already and there was no need of adding to the burden.

While noting the country needs other sources of revenue to augment the depleting oil revenue, he said there was need to combine oil and non-oil revenue sources and tax as a way to survive.

Ukoaha therefore advised the government to deduct five Naira from the present pump price of petroleum products and use it to finance road maintenance instead of collection of extra five Naira for the purpose.

“We must dissect it properly; government should deduct five Naira from the N145 been collected on a litre, instead of adding extra five Naira, and use it to finance road maintenance.

“So that you are not taxing the masses again.

“So, if the government deducts five Naira from that amount and allocates it to the sector to finance road maintenance, everywhere will be calm and everybody will be OK,” he said

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