The Lagos Chamber of Commerce and Industry (LCCI), has backed the call by the World Bank that the federal government should increase the pump price of Premium Motor Spirit popularly called petrol to N750/litre.
The World Bank, on Wednesday, said the FG may still be paying for petrol subsidies as fuel prices in Nigeria are currently not cost-reflective. It said Nigerians should pay about N750 per litre as against the current price of N650 in some places.
The LCCI in a statement by its Director General, Dr Chinyere Almona, noted that it shares the concerns of the bank about the Nigerian economy despite the reforms carried out so far including fuel subsidy removal, liberalisation of the foreign exchange market, removal of 43 items from FX restrictions and tightening of monetary policy.
“On the partial return of subsidy, the chamber supports the views of the World Bank and the need to adjust petrol prices to reflect market conditions. Over the years, the chamber has consistently advocated for the full deregulation of petroleum products. We are, however, worried about the monopoly in the importation and supply of the products by NNPC and the lack of transparency in the pricing of the products,” it said.
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It advocated for far-reaching reforms and commitment on the part of the government to improve transparency and a comprehensive strategy that will improve the performance of the Nigerian National Petroleum Corporation (NNPC) and other Government-Owned Enterprises (GOEs), including privatisation options.
“However, we do not support the immediate increase in value-added tax (VAT) due to its cost impact on consumers in the immediate term,” it said.
In relation to the unstable FX market, the chamber recommended that the government, in the short term, must address the supply gap in the market and improve its forex earnings by declaring an emergency in oil and gas production.
In the medium term, it said the government must strategically pursue and incentivise the local production of basic household needs that are being heavily imported to reduce the huge demand for FX. Further, there is a need to build market confidence around free FX pricing and implement policies to channel FX supply into the market.
Meanwhile, the chamber has expressed concern about the continued uptick in inflation, stressing that it offers investment disincentives to businesses, squeezes consumers’ income and spending, and constrains manufacturing productivity in the country.
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