The Lagos Chamber of Commerce and Industry (LCCI) has put forth critical recommendations to the Federal Government of Nigeria concerning the rising cost of petrol, urging a strategic measure to stabilize fuel prices and alleviate economic pressures on both consumers and businesses. The LCCI President, Gabriel Idahosa, advocated for a pegged exchange rate of N1,000 to one USD for crude oil supplied to local refiners. This adjustment is aimed at reducing the inherent costs of petrol production, which would subsequently lead to lower pump prices. By lowering the price of petrol, Idahosa argues, the government would not only reduce transportation and logistics expenses but also stimulate broader economic activity, which is essential for alleviating the financial burdens currently afflicting Nigerians.
The current economic landscape has witnessed a staggering increase of 430% in petrol prices since President Bola Tinubu took office on May 29, 2023. This surge has had crippling effects on various business operations within the country, prompting further calls for actionable solutions from the government. Recently, the Nigerian National Petroleum Company Limited raised the price of Premium Motor Spirit from N897 to N1,030 per litre, marking the second price hike within a single month. These rising costs have exacerbated the financial strains faced by businesses, making it imperative for the government to clarify its stance on fuel subsidy removal, which is a central element of the ongoing fuel pricing crisis.
The uncertainty surrounding fuel subsidy policies has not only burdened consumers but has also hindered business growth and planning. Idahosa urged the government to resolve ambiguities regarding whether the removal of fuel subsidies is complete or only partial, stating that regulatory bodies must provide clarity on local fuel consumption metrics in Nigeria. Such transparency is crucial for businesses attempting to devise long-term operational strategies in a climate marked by rising costs and fluctuating fuel prices. Effective regulatory guidance is necessary for fostering a stable environment that supports productive planning and investment efforts.
Additionally, the LCCI highlighted the necessity of fully implementing the Petroleum Industry Act (PIA), which is designed to enhance the efficiency of operations within the oil and gas sector. The successful execution of this Act is expected to attract foreign investments, thereby strengthening the local refinery sector. To supplement these efforts, the LCCI proposed increasing crude oil production domestically while simultaneously addressing the rampant issue of oil theft, which has seen significant amounts of Nigeria’s crude being siphoned and redirected to neighboring countries for refining, only to be imported back into Nigeria, thus complicating local market conditions.
In a bid to diversify mobility options and reduce dependency on petrol, Idahosa emphasized the importance of transitioning towards Compressed Natural Gas (CNG) as a viable fuel alternative. He recommended the establishment of widespread CNG refuelling stations and urged the government to offer financial support to facilitate the conversion process for businesses and consumers transitioning to this cleaner energy source. Such initiatives could mitigate the severe impact of fluctuating petrol prices while promoting a more sustainable energy consumption model in Nigeria.
Finally, the LCCI called upon the government to enhance communication of its economic policies, stressing the importance of clear, consistent directives during these tumultuous times. Businesses currently face a multitude of challenges, including rising inflation and increasing operational costs, which have made strategic planning more complex. A transparent and straightforward policy direction from government entities would equip businesses with the necessary clarity to make informed decisions and adapt to evolving market conditions, ultimately fostering a resilient economic environment that could spur growth and development in Nigeria.
