The Lagos Chamber of Commerce and Industry (LCCI) has expressed concern over the recent increase in the petrol pump price from N855 to N1,030 by the Nigerian National Petroleum Company Limited (NNPCL).
The Chamber warned that this hike would further distort business operations and create a challenging environment for businesses.
In a statement signed by its President, Mr. Gabriel Idahosa, LCCI said, “The Chamber wishes to express some concerns about the latest increase in petrol pump prices across the states.”
While acknowledging that the fuel price hikes might be part of the government’s broader plan to fully deregulate the oil and gas sector and eliminate fuel subsidies, the Chamber noted that the resulting uncertainties and controversies are causing significant disruptions.
“The dynamics and controversies around these steps create most of the distortions we experience in the business environment, making businesses operate under dark clouds of uncertainties,” the statement read.
LCCI also questioned the unclear direction of policies from the Ministry of Petroleum Resources, NNPCL, and other oil and gas regulators, which it says have compounded these issues.
The Chamber also expressed confusion about the relationship between NNPCL and the Dangote Refinery, stating, “The controversies surrounding the working relationship between NNPCL and the Dangote Refinery are equally confusing.”
Businesses, according to LCCI, are already facing mounting challenges, including rising operational costs from logistics, power supply, scarcity of foreign exchange (FOREX), and inflated costs of third-party services. Since the inception of President Bola Ahmed Tinubu’s administration, petrol prices have surged by approximately 430%, further squeezing businesses and consumers alike.
“These indicators may worsen in the coming months due to a thriving speculative environment, harsh regulatory ecosystem, unguided controversies, persistent insecurity challenges, and weakening purchasing power that restrains demand for goods and services,” LCCI warned.
To address these challenges, LCCI called for a comprehensive approach that considers social, political, and economic factors. It urged the government to clarify whether fuel subsidies have been fully or partially removed and to provide transparency on local fuel consumption levels.
The Chamber also recommended a concerted effort to increase crude oil production and reduce oil theft to prevent the illegal exportation of Nigerian crude to neighboring countries.
Moreover, LCCI urged the implementation of the Petroleum Industry Act (PIA) to fully deregulate the oil and gas sector, reduce uncertainties, uphold contract sanctity, and attract foreign investment.
LCCI further suggested that subsidy savings should be invested in infrastructure development to mitigate the economic impact. Additionally, the Chamber proposed pegging crude oil supplied to refineries in Naira at an exchange rate of N1,000 to $1 to lower petrol prices for consumers. This, they argued, would reduce logistics and transportation costs, stimulate economic activity, and help alleviate financial hardships.
“A reduction in transportation costs would also significantly contribute to lowering food inflation, as transport is a major component of food production and delivery costs,” the statement added.
The Chamber concluded by calling for clearer communication from the government regarding policy directions to restore some level of certainty and support business planning and decision-making.
